Emin Gün Sirer: Avalanche – #419

Transcript

so welcome to app center the podcast where we interview crypto founders builders and thought leaders about the future of crypto so i'm brian crane and i'm here with my hair my hair who's uh doing a comeback right from from his break from um cancer so so amazing to have you back thank you and we're going to speak with goon um amin gunsair about avalanche she's actually been on this podcast um three times before and maybe we can start off by briefly mentioning the old episodes we did because it was like interesting sort of through the journey of crypto but before we get started uh just very

briefly about two sponsors so first of all uh proof of stake is transforming crypto and you can be a part of it and you can start participating in networks contribute contribute to network security unearned rewards by staking with course one so we're a staking provider with billions in assets lots of customers on many different networks so if you're interested in running your own branded nodes you can also do that and you can go to a header you can go to course at one to learn about it and then also paraswap so if periswap you can beat the market price uh it's fast highly liquid and they just launched a v5 which has a new contract new apis it's a modular infrastructure more gas friendly and supports free approvals using ethereum permit and they also

recently added support for other networks like avalanche uh and yeah polygon and psc so you can go to periscope.io and you can get started there and now with that let's go to our spoon it's so great to have you thanks so much for coming back it's so great to be here it's so great to see you both and maher so wonderful to be talking to you again this is fantastic thank you yeah i was uh i was looking through like preparing for this i was looking through the old episodes we did and it's pretty interesting so we did one in 2015 which was around selfish mining together with

itai so that was kind of one of the papers looking at you know some maybe game theoretic weaknesses around proof of work and bitcoin and then we did another episode the same year which was about again with italian which was about bitcoin ng bitcoin ng was basically this idea for how to scale uh you know transactions we put on bitcoin like by a lot while basically keeping the consensus algorithm like fundamentally unchanged so i i remember that and i was like this is so elegant and really cool and like why like you should like implement that in bitcoin and uh and so maybe doing this episode with you there and of course that was a lot around this this whole block size

debate and you know there was people like mike kern and gavin greeson and you like trying to get like new ideas into bitcoin uh so you know you were very involved back then and i think those were like super interesting discussions and then we had another episode of you which was the year after 2016 with vlad zamfir together and it was right so and this thing had launched an ethereum called the dao and it had accumulated something like 10 of all the ether in there and you uh you guys wrote this blog post about like oh here are all the like design flaws and weaknesses of this thing and actually my hair had also been like writing online about like oh this other

thing that's also flawed and i was like reading through this and so then we give it this episode and then of course right after it's the biggest hack that happened of uh in ethereum's history uh certainly in terms of the percentage of the number of ether involved and that then the split of uh ethereum interim crash uh within classic and uh and what was also interesting at a later point you know the sec wrote this paper about the dao being a security which was the first uh kind of the first time the sec really made a statement about uh how they view tokens and token sales so that was like the year after and one

of the one of the evidence that they quoted in this thing that this was a security was what the way flat sampra had described the curators in our episode so it was very cool that we had like a podcast cited there so yeah such great episodes we have with you and like great discussions and then there's been a far too long gap given all the things that happens and all the things that you've done because it's been like yeah you've done a huge amount following that as well it's been a great ride it's been a great ride we lived through i don't know how many market uh upturns and downturns together and uh but i remember the very first episode we did together it was by

far the most informed by far the most challenging conversation i had at that point and it was fantastic i was like whoa look at this these guys are asking all of the right questions it was such a blast but yeah it's been five years i think since the last episode or something right this is five years since 2016. and there has been much that has happened layer twos have come and some gone nothing ever goes away layer twos have come and kind of floundered new layer ones are here uh there's another batch of uh competing uh competing projects lots and lots of excitement the entire space has grown tremendously is poised to grow even more and um you know back when we last talked

it was just people like us it was just just geeky geeky people and and now it's just uh i talk to fund managers i talk to endowments people are in charge of endowments and so forth so it's it's a very different uh you know ecosystem out there and uh the dapp system is thriving i mean we've come such a long way it's so fascinating and it's so great to come back to good old friends and and uh and you know chat about where we are today so um in the in these intervening five years of course the big story is has been avalanche right so i mean

the initial idea in white paper was from a team called i think the rocket labs which the team remains anonymous to this day as far as i'm aware and then a month or two after that white paper came out came the announcement that you'll be building it and now you've built it and you've shipped it right and following from twitter i also saw that at some point while starting to build uh avalanche you decided to take a sabbatical from cornell where you were a full professor and when i saw that tweet i was like oh that must have been

a big decision what was it like for for you to take a break from being a pro like you know being a full professor there and embarking on a journey like this it was it was very straightforward actually mayor it was very very simple for me um because uh you know as a professor you're constantly coming up at the research university you're coming up with new ideas you're coming up um with uh with new ways of approaching problems and you are working with some of the best and brightest people on the planet so uh so we do this um and you don't necessarily pay attention to product market fit right so as a professor you're there for the academics you're

there for the science so you're trying to figure out the ways of of advancing us so i worked on a bunch of other topics in the intervening five years so i worked on characterizing decentralization i worked on characterizing scalability i worked on a layer two protocol uh t-chan t-chain that's really really fast i think it's the fastest layer two protocol and uh but at some point you work on something that is so big that as soon as you do it you go okay this is this is this is important and um and so my whole life i had been you know educated i'd studied this stuff i never thought consensus protocols could be fast i never thought byzantine fault tolerance could be cheap

and uh and as soon as uh you know we we started dealing with the avalanche protocol we noticed that hey this is going to be big it's just so different from everything that came before us it's so different even other academics don't understand just how how important it is and and they can't even fit it into their frameworks because it's just so much so much better across so many different dimensions so as soon as i had that in my hands it was a very straightforward decision i decided to take a break from cornell i ended up taking one year of leave of absence formed the company started building it up shortly thereafter we got some funding from anderson horowitz and from some

crypto funds including polychain naval uh and others initialized you know alexis ohanian etc and so that was a great start and and then of course after that the rest is history we we launched um about a year ago i think it's been 14 months so we're only 13 or 14 months old it hasn't been that long at all we're up there with the big boys we're up there with systems that are far older than us and um and it's it's been wonderful and mayor i can tell you something else that you maybe don't know um and this might be one of the one of the places that that this comes out but back in september this september so three years after i took oh i should

have mentioned i took a year of leave of absence i extended it for another year for two years then i requested permission for a third year and cornell doesn't allow typically like it never happens that they give you the third year they were nice enough to give me the third year and then at the end of the third year last september it was time to make a decision go back to cornell or or stay at avalanche stay at other labs and work on avalanche and and i made the decision and the decision was to to be at ava labs to not go back to cornell so i've stepped down from my position at cornell and gave up my tenure and i am full-time on avalanche because i think that's clearly where the

the future is that's clearly where the most happening place is when it comes to research and development on blockchains let's talk a bit a little bit like what makes avalanche so unique and are there like is it just in your opinion is it just unequivocally better than like everything else or like what are the trade-offs that avalanche has as a consensus right so the issue of trade-offs is very important right and uh people always think like this is like judeo-christian values like you can't have anything for free you have to give something up to get something right and you know that's typically true

as long as you stay within the same family of of technologies so if the goal is to move a lot of earth and you've got a small shovel with a short handle and i invent a big shovel with a longer handle you know there's a trade-off there we're using the same technology but as you make the shovel bigger then it carries more weight you need more strength as you make the handle bigger then you have to have even more strength etc so that's fine and then along comes somebody with a steam shovel that's a different technology and it has uh it completely changes the game it changes the game brings on the industrial revolution and you go from like being a pleb with a little shovel in his hand to

someone who can who can really excavate the earth so um in the case of avalanche are there are there trade-offs obviously there's always some trade-off but across everything that people have ever said matters to them avalanche is a huge step up it is the third biggest breakthrough in the space of distributed systems it is only the third time that somebody invented a new family of consensus protocols the first family classical consensus it brought two touring awards to the people who who established that field and all the hundreds of protocols that followed all descend from that work so and everything that you hear that's proof of stake today that isn't avalanche is using a

classical protocol typically from 1999 sometimes from 1980s and so protocols like polkadot solana etc these are all using classical consensus in which all of the validators collect information from all of the other validators there is there's all to all communication there's n squared communication uh the second big breakthrough was proof of work mining so bitcoin and satoshi came along and they did an amazing job they changed the consensus protocol and they said hey guys there is a better way to do this it scales much better it's far more robust except of course the problem is it consumes a lot of a lot of a lot of

power a lot of electricity and avalanche is the third biggest breakthrough it's uh it's efficient like classical protocols it doesn't have any mining in it it doesn't consume energy it doesn't leak money out of the ecosystem to the miners and to the power companies and uh and at the same time it's it's fast the latencies are are incredibly low we're getting confirmation latencies of 750 milliseconds these days these are insanely fast speeds nobody ever comes close so um so that's part of what the the magic that makes it really really fast and what are the trade-offs i think there's always some trade-off maybe but because you're going from some

crappy technology to a much better technology you can be better than what came before you on every metric that matters the um when people ask me what the biggest downside is of avalanche i i do need to be as a scientist we need to be upfront with our our weaknesses the biggest weakness is that it's a new protocol it's not as well established as say bitcoin is it's not as well established as classical protocols are so you know let's say the salon the protocol behind solana it's incredibly well understood so you should be able to write that stuff and get it correct you should be able to operate that network without downtime forever after it's not very hard you can

get a master student to write that code it's doable but avalanche requires a little bit of you know a little bit more complexity and and a little bit more nuance and no one has ever done anything like it before so there are risks associated with new protocols i would say that that's the first one and is it better than other protocols across all dimensions no if you have a highly centralized network if you have a network consisting of let's say up to 10 nodes maybe up to 20 nodes then all to all communication might be better than avalanche style communication so 10 squared is not a very high number so if you got 10

validators then you probably should use like you can use an old school protocol like tendermint or solana or whatever so if all the decisions are being made by a small set of nodes then you don't want the the the avalanche complexity and in fact avalanche might be slower because of the way it operates it might be just better to have a a uh a multi-round a fixed number of rounds three rounds of uh all tool communication which is what pbft would do in such a scenario so um so on the very low end avalanche might be not suitable for you but the magic of avalanche is as you add more validators as you build truly decentralized systems then it outshines

the competition by a mile and a half so it scales differently and if you have thousands of validators it's so much better than than the alternative than the classical protocols so oftentimes i hear that one of the one of the downsides of avalanche is that bridging to avalanche is hard and eventually everything like the way to bridge to avalanche is to build trusted bridges and actually the bridge between ethereum and avalanche is actually is actually a multi-sig bridge which has been secured by sgx but it's essentially a set of signers running uh running a bridge

uh do you think there is any grounds to maybe that avalanche consensus makes bridging hard into the ecosystem other chains that's an interesting question so um okay so there is a lot to unpack there so let me try to unpack it um i think some of you know the first part of what you said derives from our first bridge so for the longest time we were using a conventional bridge uh that is uh residing on ethereum and avalanche and the ethereum side uh was executing on chain so it was a regular chain a regular bridge from chain safe and in fact it's a chain it's a bridge that's used by quite a few other protocols besides us we found that it was quite

fragile and at times there were some issues with it that that we were aware of that could have cost uh you know [Music] a lot of a lot of coins to other people who are using the same bridge so it's at some point we decided hey we need to ditch this thing and we need to go to a much better foundation so we built an entirely different kind of bridge based on a very different kind of technology for secure execution as you mentioned it's called sgx it ensures that the bridge operator cannot modify the code of the bridge the bridge operator cannot gain access to information that's stored inside the bridge in particular the bridge operator

cannot access the the all too important secret which controls all the funds that are in the bridge so the bridge can only do one function it's got a hash of its code and as long as that hash remains unchanged the bridge can can do only one function which is take your funds on ethereum and give them to you on avalanche and vice versa the virgin job so um that's a first of its kind bridge ever since we installed it ever since we made it public we've got nothing but huge praise i believe it is the smoothest bridging experience out there it's fast it's super cheap because nothing almost nothing happens on the ethereum side you

just have to send your funds to the bridge address so it's just a single transaction it's a very simple simple transaction very very gas efficient very very low cost so um so our bridge has been getting praise from everybody there's also a meme going around good bridging so gmgb every morning there's a coin that somebody issued to all the bridge users called gb and uh it's fantastic to have that as well so the bridge has really been good um and one concern misconception i want to correct is um it's true that the uh the key secret inside the bridge is divided split and uh distributed to four different uh what we

call wardens of the bridge and the reason for that is not technological necessity so if we wanted to we could make the bridge completely trustless we could just have it operate as a black box secured by sgx the key is only inside the box and it's nowhere else but that's a little risky this is brand new technology we just built it we are really proud of it nobody else else has anything like it a lot of other coins are coming to us right now and saying hey can we use your bridge by the way and uh but you you can if you do this thing that i mentioned which is where you where you keep the the private key only inside the bridge then if something goes wrong if there's a bug

in the bridge if there's some mis-execution for whatever reason then you can get into a situation that you cannot recover from and that would be terrible so uh so to avoid that what we did is we we simply say look there's some some secret here it's going to control some funds we will split it up and divide it uh to independent parties so that um in case something bad happens then those same parties can reconstitute the secret and get back at the funds it's a safety and security measure it's not a technological necessity the bridge is is not trusted or it can be made completely not trusted and the secret can be made completely local

but that's dangerous so for a while to come i plan to run the bridge in this current configuration where the secret is uh is distributed to multiple parties um they're all independent they are you know they've been chosen not to not to be not to collude with each other uh some of the new parties we were planning so we plan to expand that set of parties by the way and we plan to bring in uh just quite a few uh bigger players so um but we are very happy with the bridge and how it turned out i think it represents the best of the bridging technologies out there the cheapest for sure definitely so um i mean when you look at like the history of bridges in this in this ecosystem

i mean in the beginning the idea behind many of these bridges was that chains would verify each other's consensus and then this chain a and chain b and then some event x happens on chain b and then you can submit like a cryptographic proof on chain a and chain a can verify that cryptographic proof that event x happened on chain b and then it can take a dependent action y based on that proof so we started off with that notion generally and then and then what happened was like the space accelerated so fast that in reality nobody could really

implement these kinds of schemes at a good enough level to be used commercially so everything boils down into having you know like five signers or 10 signers or 20 signers and that includes the bridge between solana ethereum like many bridges around the ecosystem are based on signers you know some group of parties that are selected by usually the foundations of the chains that are bridging and then these signers are possessing these keys and their multisig accounts on both sides and they're doing the bridging and now of course avalanche has done like a very big

you know operational improvement on that setup by having the code of these signers run inside sdx enclaves where some guarantees can be made about these enclaves subject to the overall security of sgx itself which is which has been a matter of debate in the general computer science and cryptography community for 10 or 15 years sure should we use sgx at all right like but avalanche has implemented that into sgx but do you see in the future a new generation of bridges coming between say ethereum and avalanche where it doesn't depend on signers where um

there can be something else beyond signers or are signers really the edge of human knowledge and the game is about making designers more and more secure and that's about all we can do today right very good question so uh so first of all let me handle the the immediate question which is um so what's really going on behind behind the bridge well what's going on is you need to make sure that something happened on chain a and therefore authorize a corresponding action on chain b right so brian brought his cache over on chain a and now we have to give him rap tokens on chain b or vice versa he

brought his rap tokens over we have to give him the original coins and so you need to establish whether or not consensus took place and so there are different techniques for doing this depending on on what your underlying technology is but it all comes down to collecting signatures as you pointed out ideally you would want to collect signatures from everybody on one side who's affected right so um so on ethereum everybody who matters believes that brian brought his coins over and then therefore corresponding action should be should be authorized so uh so that's a good question so how do you do that um it's hard to determine everybody who matters it's hard to uh

it's also very very costly to collect signatures from everybody on earth if you try to do it then this act of collecting signatures can itself become a security hole because suddenly people can can dos you by asking you to sign a whole bunch of things so um so it's a it's a dangerous i mean it's a complicated game to play at some point most everybody realized hey there are only a few people not few but there are only so many people on each chain that that that really matter like finance matters if binance believes that brian brought his funds over that's important um my notes probably don't matter all that much but you know the avalanche overlaps

foundation nodes yeah that's uh that's our avalanche foundation nodes that matters so um there are there are some people or some nodes that you can identify as as being important in that ecosystem and you can piggyback your decisions on them and that's what most people have been doing um can we can we get to a a mode where we don't have these i think it's hard man um because uh if you do like as you start pulling everybody then then that is a lot of cost for for everybody and um and if depending on how the bridges are used you know that that those requests may be too way too many in number there are

people working on less trusted bridges um like axelr is working on one and there are many others actually currently looking at various different technologies for making that execution faster or cheaper or more interoperable but i don't know of anybody who will be able to beat the efficiency of an sgx implemented execution technology now second point unrelated tangent and i think i can say this because i'm an academic academics love what do they love they love intellectual challenges let's put it that way they love tying their hands behind their back and solving something that's uh you know

that that you could easily solve if you had both hands open but now that you had one hand behind your back it's a different they love these sunday puzzles and secure secure bridging or secure execution in an environment where nobody has any hardware support is really hard it's so challenging and there are so many academics out there that made a living out of this they devoted their careers to these kinds of problems what other kinds of problems that they devote their their their lives to you know there's somebody out there that we all look up to we love and spend a lot of time multiple years solving the problem of a leader leader assignment leader election and id

assignment in a in a in a network that's organized like a ring where none of us have unique ids okay so so imagine uh so he you know essentially is saying look there might well be networks where we're talking a ring i can only talk to my right neighbor and left neighbor i need to elect a leader and everybody else needs to elect the same leader and none of us have ids and this you know this gets dozens maybe hundreds of papers it's a really interesting problem and it's really hard to solve it turns out but you know how like people how we solve this problem in real life we just look inside the ethernet card every ethernet card has a unique number okay the industry makes sure it's unique

that's your unique id it was assigned to you we're done okay so tiny bit of hardware support it's just obviated years of research you know once you have that unique number leader election is incredibly trivial all of that work disappears so now if you go to someone like this who's spent many years built trying to build complicated protocols and algorithms and so forth and you say look i've got this chip it does secure execution all your work you know it's kind of silly they will react and say well it's got issues with it blah blah blah yeah of course it's got issues with it um sgx has been broken a few times and every time it gets broken you know what how long does it take it takes two days and then within two days intel has a patch

for sgx so i wouldn't listen to these academics all that much they're nihilus nothing is good enough academics are by nature just like those people in the big lebowski they believe in nothing right so remember the nihilists there and nothing is nothing could be good enough and they always worry about the worst case now the bridge of course is a situation where you do have to worry about the worst case but starting with the premise that the hardware is unhelpful is a silly starting point so imagine trying to do imagine trying to dispo in back in the 60s there were people who were trying to do multitasking on on regular computers and it's really hard and they developed a

lot of cool techniques and they were all proud of them and and you know multix was doing cool stuff and so on but then the chip manufacturers come to you and say hey we added a feature we added a way to save your register set atomically and then suddenly all these tricks that these people developed are silly and you just use that primitive to build a system like unix and the rest is history things just take off so do we need the complexity of all these uh complicated things no i don't think we do and then final third rant on this topic i think you are you are right on when you point out the importance of bridges i think the next year is going to be a battle of bridges not the war the war is various is really big there's

like multiple fronts to that war but the battle is going to be with bridging and um you'll see at least a half a dozen new bridge technologies come come to the scene and uh the chains with the best bridges the most fluid experience the best user experience the cheapest experience are going to win and they will get the tvl as we've been seeing in the case of avalanche so um so we're uniquely situated in that battle and we have by far the best technology um and it's going to be fun to see other people try to replicate what we've done and it'll be it'll be really interesting um so that's that's the next year coming up i'm glad about i'm very very happy about where we are and i just want to give your readers or listeners a heads

up about what to expect uh there will be lots and lots of cool cool bridge bridges come online there will be some spectacular bridge failures every now and then and it's going to be a fun ride cool that was uh that was really um really great and i think that makes a lot of sense one thing i also wanted to speak about so the topic i've been thinking more about is a topic of mev right so meb on on ethereum of course is basically miners ordering transactions using basically this sort of monopoly over this block space to do things and then you know now then there's like you know adapts that try to mitigate that or you know flashbots that tries to deal

with it and it's interesting what that looks like in a non-proof of work system in a proof-of-stake system or and with different consensus algorithms too that i think affect this so i'm curious like what what are your thoughts on mev on avalanche what a worry what's a great question i've worried so much about mev um really really really interesting field so for for people who are listening so mev is this thing by which participants to your protocol can jump in and and extract some value by jumping ahead of other other natural transactions occurring in the system you see somebody

trying to buy something on say uni swap you you you jump ahead of them you purchase purchase ahead from them and then ahead ahead of them and sell to them um and you know that's the simple kind of you can sandwich their trades you can do all sorts of things to extract value um on avalanche so there are multiple different avalanche deployments or avalanche protocols or protocols in the avalanche family and so until i would say maybe uh june or so yeah until about four months ago or so five months ago or so we used a version of our protocol where anybody could propose a block in any slot okay so completely leaderless

and and so actually the current protocol we're using is still completely leaderless it's still true what i said is still true but we added an optimization so back in june we added an optimization and it's been a game changer if you use the initial avalanche protocol with where anybody can come in at any time then then a single mev extractor with a single stake so brian comes along he buys one one unit of steak and um and he starts uh doing whatever he does he can jump in and he can jump ahead of any transaction in any block okay so that's uh that's what could have happened in that protocol and that's

what was happening in that protocol and um and we got the id we heard from the grapevine that there were some people extracting multiple thousands of dollars per day maybe thirty thousand dollars per day etc from the system this pales in comparison to what can happen on a chain like ethereum on ethereum many millions are being extracted via mev per day there is a lot of money being made by by the miners because the miners are in a unique position to uh to jump in at any time so on avalanche that we noticed that this could have been a problem we immediately applied an optimization where we slightly favor a given uh given proposer in every slot so um you know so

proposer you know 37 let's say brian gets slot 37 he gets a slight advantage in slot 37 but otherwise he needs to be in line there are maybe another thousand uh you know miners or stakers in rotation so that suddenly reduced people's ability to jump in and um and so that has had a an in immense effect the amount of mav extracted from avalanche i haven't characterized it but has i believe it has dropped down significantly by multiple orders of magnitude and uh and also it creates a nice dynamic if you want to be in the mev extraction game now you have to buy a lot of a vox steak

and and participate in consensus as a first-hand consensus member so that's been uh that's been a great change and um and it made the protocol even more resilient but at the end of the day there is one defense against mev extraction that is that is incontrovertible it's the best defense and that is if you have a fast protocol then mev extraction becomes really hard so when your protocol is lagging let's say 15 seconds behind real time like it is with uh with ethereum then there's so much mev to extract you know the future right people submitted transactions 15 seconds ago and there

you are about to craft your block as a miner in ethereum and you can do whatever you want because you know how the prices changed in the intervening seconds and in the case of avalanche we are by far the fastest chain we're the only chain that goes from submission to completion in less than a second our time to finality is 750 milliseconds these days so we go from initial injection to to being completely done with the transaction in in the blink of two just two blinks of of the eye so like you do this and it's done and so it's so fast that the value to be extracted is much lower that's uh at

least an order of magnitude faster than than other chains so it's an order of magnitude faster than ethereum it's an order of magnitude faster than solana so that's uh that's how you i think eliminate most of the mev and then these other optimizations at the protocol level uh they create a nice dynamic whatever remaining value there might be uh goes down uh substantially so um we've uh we've done we've done a bunch of things as i mentioned so we are naturally uh i think possess low value and with just a small optimization we managed to turn the game upside down and uh and force the mev extractors to have to hold a lot of stake which is a great thing

for the the lvox token holders so i mean back when the avalanche was very early on right so one of the things that i that i loved about avalanche is that it was the first like leaderless consensus algorithm by which like what do you mean when you say leaderless consensus algorithm in bitcoin every 10 minutes there's a winning miner the winning miner has a block and then it can put transactions into the block and it has full you know full volition about which transaction it puts in and then then came a generation of proof

of stake protocols which includes tendermint which includes solana which adopted you know these other family of consensus algorithms that you mentioned earlier based usually on practical byzantine fault tolerance from 1999 uh where where there's there's again a leader and that leader keeps rotating and there's a leader schedule where you know who the leader is going to be and whoever is the leader can put transactions in the block and can can order them and in avalanche what was very very impressive like very early on was that

if anyone can propose a block and then the network can will come to consensus on one of the blocks and it will discard the other blocks but this consensus will be built ground up by the polling that's done by by the various nodes themselves and then it seems like what happened [Music] this seems like what happened was that um when anyone can propose a block then maybe the network could split into validators that are naive that are not able to not trying to extract mue at all because they're just downloading some software running it and then there are

like some very sharp validators that are trying to extract the mav they can try to position themselves in the network in ways that they can influence which block ends up becoming finalized and they can try to extract mab and to sort of defend against that avalanche has somewhat of a leader schedule now except that maybe leader scheduling is not as strict as you know you know tender in tendermint it's very defined a is leader whereas in avalanche it's like well if it's a then b then c but if if a proposes then they have an

advantage but if a doesn't send the block then x or y could send the block and theirs will get accepted it is exactly it is like a weekly leader schedule yeah and so with this week leader schedule what what's happening is sort of like avalanche in my mind is kind of like becoming equivalent to you know tendermint or solana or eth2 in terms of mev because they're still in terms of me no no it's are we becoming equivalent no um let me see let me think about that um in some sense in some sense so um uh

is that what's happening no i thought about this before and my conclusion back then was no it's going to forever be a different profile um and uh hang on but i do need to recreate my uh my thinking one of the things i love about talking to you guys is that we just kind of talk so i didn't come into this knowing what questions you would ask me so uh so bear with me as i try to think this up on the spot so um if uh if we were to take a look at uh a system like whatever tendermint let's say versus um versus avalanche uh with with the weak leaders uh in place then um uh yeah no there that that's true that uh the weak leaders do give an advantage

to a chosen person per slot that's definitely true and in that sense we are similar to what's happening on other chains um there's still a huge difference between being a chain that takes let's say you know in the case of solana like 15 to 20 seconds to i think 12 seconds whatever the number is um 12 12 to 20 seconds to finalize versus a system like avalanche that's taking less than a second to finalize so that's a huge reduction in mev the entity that can extract mev does change and in a leaderless system anyone can extract mev at any time and with a weak

leader then there's a there's a dedicated person who's a designated person who is in a favorite position per slot and other people will find it very difficult to extract mev so i think that changed that optimization for avalanche with weak leaders was a good one it drastically reduced the amount of mav extraction it changes the way you extract mev as well so anyway you know we can talk about this at length and the bottom line is you know what's the slippage you get when you go to avalanche when you go to you know you you've bridged over you're going to use pangolin instead of uni swap or you're going to use trader joe or yeti swap or kind of canary or whatever

instead of whatever people were using on ethereum so what's what's the slippage you get who jumps ahead of you and and how much how much worse execution do you get and at least at the moment i can just look empirically and uh and you know my eyes don't lie to me the the execution on on avalanche is incredibly good compared to what happens on uh on let's say uni swap every single bit every single ethereum miner is extracting mev right now all of them and the way the avalanche network is there are so many people who are securing the network and so many of these people are first-hand participants in the network

that they just will not do any of these attacks so that's i think the big difference when you have a designated minor class you have these people who are sharks you know how miners are right they're there for the money and only the money they are not really forward thinking they have some calculations they've made and if someone comes along and says here is uh here's some you know here's some trickery that allows you to make more money they all jump and start using that that trickery so that's what's happening on ethereum and i see no reason for why that should change we've seen this in the case of bitcoin miners as well they are completely profit driven so they will do whatever makes sense for their profits

and in avalanche the way the protocol is the vast majority of the stake is not extracting uh is not extracting you know my nodes are never going to extract mev from any user so when it's it's their time to propose blocks they will do whatever is right so that's i think a fantastic situation to be in and the mev to be extracted is far lower than a system like like ethereum now that definitely makes sense i think like that's one of the big differentiators of of avalanche which is like it's not a very delegation heavy system where in in other proof of stake systems

because you have usually have limitations on the number of validators like in a tendermint chain like you probably shouldn't go above 150 validated so there you have to have delegation where i as a holder of tokens am delegating my voting power and consensus to a particular commercial entity and then when there are these commercial entities then uh of course they will have professional mev extraction systems if not today then eventually right like the the nash equilibrium is is sort of everyone runs an mvd extraction system and distributes that we are lower commissions or something something else right

but in avalanche because essentially there is not a limitation on the number of validators anyone who has coins can become a validator and so um the hope can be that well at least a certain fraction of the network that is regular people running validators won't have professional meb extraction systems now that can be the hope now of course like there's going to be entities like i don't know probably binance has a lot of avalanche tokens or the exchanges will have a lot of avalanche tokens and they'll have an avalanche validator and they'll end up running mov extraction systems in the future but

a pro probably a bigger fraction of the avalanche network compared to other proof of stake networks might be one where people are still running like naive code with so that could be that could definitely be a structural advantage in in avalanche one one curiosity i i have about you know is like it's not the technical curiosity anymore it's like uh in the in the beginning right like there was bitcoin and there was ethereum and these were there was a point where these were the only two that mattered and there was an earlier point where it was just bitcoin that mattered

and kind of both of us have seen those points in history and um you know um and now there are so many chains most of them don't most of them don't matter but yet it's like even in the chains that matter you see that like they are starting to develop very distinct personalities now for example i i couldn't go to the conferences in portugal but um but my friends tell me that there was a cosmos conference and there was a savannah conference and my friends tell me that you went to the cosmos conference it was like you know a bit like the earlier crypto nerds kind

of hanging out kind of atmosphere but when you went to the solana conference it was like it was like very business-like and uh you can see that it's like i mean there are wall street firms that are now trading on solana and you can feel like oh there's this wall street energy that's like you know coming into into that chain and it's it's a different atmosphere it's kind of a different community and you know like it's like a different go to market as well did you see the discussion they had um i saw a picture from you know they have different sessions and and different lectures they had one lecture on solana and decentralization

giant room maybe like 15 people in it so so that tells you about uh about how much they care about decentralization in solana in the solana community that was uh that was an interesting site to see so you are absolutely right all these chains are developing their own personalities their own ecosystems their own user groups so um so i'm curious where you're going with the questions so uh yeah and i'm like yeah what's the you know like what i mean one way of stating is what is like you know what what do you think is like the target market for avalanche like what kind of community or distinct subculture of projects is avalanche cultivating

or i mean what is like top-down cultivation what would you like but what is also like what what do you think is happening bottom up yeah what would i like and what's happening that's that's actually i haven't thought about that too much but i can tell you what's happening on in the trenches um we have a very strong user community we have a lot of crossover projects uh we have a bunch of projects that got funding from uh from polkadot or from solana even and decided that hey we need an evm chain and these things don't actually work that that got that funded us and so um you know solana doesn't support the evm and polka dot makes a lot of noise but doesn't didn't actually support uh smart contracts at

the time at least so uh so we have a bunch of people coming over um with with build contracts and so forth so how do i characterize the average avalanche user that's a great question i would say that because of my reach there is a fair number of people who are technically savvy so a fair number of ctos cios that uh that got in very early and they understand the true revolutionary nature of the technology that's been wonderful to to have there is a large number of people who came to avalanche because it's cheap so there's a large number of people who are overseas and they they kept watching

all these westerners all these europeans get rich and richer and richer and richer on ethereum and they were cut out you know right now you can't do a trade on on ethereum on an amm and pay less than 100 bucks it's just you know the slippage of the plus the fees is going to be pretty nasty for you and uh if your entire budget is two hundred dollars you're not going to pay like fifty dollars in fees or a hundred dollars in fees so those people were cut out of d5 they had no place to go and so avalanche attracts a fair number of these people and it has for them uh been a godsend i get every day i get a whole bunch of messages saying this has been a

life-changing experience and not only because of a vox coin appreciation which it has done really well but also because we gave them an ecosystem we gave them a home we gave them an accepting place and the people who want to run a validator we we you can just run a validator you don't have to partake in a para swap auction or not para swap our parachain auction that's ridiculous crap that's just like stuff for the rich so uh so you can get into these situations and um and be a meaningful member of the avalanche community so we attract a lot of people who couldn't do that elsewhere and they came to us we have a as i mentioned a technically savvy community um you know

go into our channels and you'll find a fair number of very very very informed intelligent people who understand how these protocols work what the differences are um the other thing i guess i would say that a lot of our users are new to crypto um you know we brought a bunch of new people in uh the area also grew uh during the pandemic so maybe everybody else also has this i don't know but i do know that there's a fair number of people for whom avalanche is the first coin they owned and that's an interesting situation such people tend to be a little bit more skittish uh they tend to be you know when there is the usual china fud or russia fud or india fud uh they freak

out a little bit more if you have a bug in your system they think that's the end of the world they don't understand that these things happen with some regularity and they get fixed um but what it is whatever it is uh it's just part and parcel of having a lot of a lot of new people um so those are i think my three uh characterizing uh points uh there are there used to be we were mostly relegated to techies but now traders are coming in and traders come in based on two things the traders come in when they see another another person with deep pockets they like to ape you know they see a rich person doing something they're like hey this guy must be doing something right so you know

that's fine that's that's a silly behavior that's but you know they do it that's fine the other thing they do is they come in because the on-chain metrics are in their favor if you look at our tvl and in our market cap we have the highest tvl per market cap okay so i can't really comment on the price but people people who've got uh lower tvls than us have uh higher market caps so we're in a very good situation high tvl is fantastic uh people who see our growth patterns they come in so more frequently these data-driven traders have been coming into uh to uh to avalanche and that's been a that's a very different community so

they may or may not understand the the revolutionary nature of the underlying technology we also have quite a few um i would say normal people so just this is very important to me and this is actually one area where i i strive to differentiate us almost all of crypto is has been appealing to the same kind of anti-establishment anti anti-everything crowd right you know they they want to break down society they want to break down the dominance of the dollar and and have say bitcoin instead or the ethereum folks you know i've heard crazy things oh what if what if we build a system that is used to store you know terrible

terrible content you know it's okay maybe that would be okay and this was coming from from very high on up and that's that's that's not where we're coming from um i think i want to or you know if you if you wanted me to to position us i would position us slightly to the uh the more humane side of where crypto is today so none of this like uh you know you lost your coins what's it to me or i got mine so screw you type type people but more of the how are you doing i i i know i will do well and i want you to do well in life as well type of people and more of the you know i could i could go by ethereum and i could i could pretend

that ethereum is ethereum two all the while knowing that ethereum is actually ethereum one ethereum is a proof of work coin it is as disruptive and terrible for the environment as bitcoin is you know so there's a huge disconnect in in some circles there and it's uh it's a little painful to watch so all these people who you know ostensibly they seem to care about things esg concerns right so they care about the environment they care about social impact supposedly and then they go and and and and use technologies that are you know 10 years old at this point proof of work is 11 years old it's terrible for the environment you should not be touching a coin like that uh if you care the least

bit about the environment you want to leave a better spot for the but you can't be using one percent of world's electricity to mine your coin and um that's what bitcoin and ethereum combine do so uh so that's um that's one area where i would like to make sure that we are everybody perceives us as being different you know we are a fast chain we're a high capacity chain we're a very versatile chain and uh the people who understand our subnet infrastructure etc the techies know this the normies will take a while to understand but most importantly i would like to attract delightful normal reasonable people people who don't want to break down society as we have it people who want to essentially preserve what we have but

make it much more efficient make the rails more efficient cut out the fat like even as i speak right above the laptop i'm watching wall street and uh and those people you know they are they're the gatekeepers they collect rent they collect they don't give you service they in fact give you poorer service they jump ahead of your your uh your order flows right so um so people who want to cut that out and leave a better world for for their children those those are the kinds of people i would like to attract so um and and i've done everything everything i know to do everything imaginable at the protocol level um to uh to to build something that will appeal to them inherently and

from now on it's just a game of uh mostly sitting back and letting the sort of the usual percolation of ideas take hold and and have people understand what it is that we have uh because i do you know it's i think clear to me that we have something that's far superior both technically to other proof-of-stake coins and also value-wise uh to uh to uh to at least some of the big incumbents in the space right yeah and really best of luck going for the journey that's that's there to come thank you mayor and uh best of luck to you as well this has been such a blast i've i've so thoroughly i was not expecting to see you today so great to

see you beat cancer so great to see you to to have a great chat with you as always as if it's just you know five years ago from where we picked up from from where we left off and uh continue the conversation so great to see my hair back so great to chat with you again yeah absolutely and hopefully we can do another one of those you know not not so far away five years definitely like way way way too far so i think that would be fun and i'm really excited to see what's you know happening in in the avalanche ecosystem we have our at our company course one we have a few people who are like uh quite into it uh so and uh yeah i'm also excited because it does feel like a

very it's very elegant um some of the design so and uh yeah i've been a big fan of your work for so many years so it's very exciting to see how this is coming to so much fruition now thank you so much and thank you so much for having me guys so uh yeah let's uh look looking forward to uh to growing the space with you all educating people and uh making uh you know just essentially i should maybe mention this at the end in closing our goal in avalanche is to bring into the space uh the many hundreds of trillions of assets that are not in blockchain form and uh this space only grows with uh with with more and more value coming

into it we built our infrastructure to allow that um i talked about the scalable consensus protocol we didn't talk about subnets maybe we'll talk about them we can talk about them at a future discussion but we have an infrastructure that allows us to uh to uh to create essentially blockchains for custom use cases um that are open or semi-open or maybe closed depending on the use case and um but interoperable and so um so we're in a in a unique position to be able to absorb that growth and we're also working to invent new um new assets so we we simply we recently came up with something called ilos

initial litigation offerings those are fun and um so in every way i've been trying to grow the space i've been trying to bring into it uh the people who bring value with them and uh and i just can't wait to see the space flourish in the next decade to come it's going to completely transform what we do yeah cool well then with that thanks so much it was amazing and i look forward to having you back on soon take care guys talk to you soon bye bye best of luck