The (ERC) Ethereum Upgrade Process w/ Joey Santoro (4626 Alliance)

Transcript

[Music] hello and welcome back to the strange waterer podcast today we are talking with Joey Santoro one of the more prominent Builders during the defi 2.0 era of the last cycle when Joey agreed to come on strange water I was so excited because there's so much to talk with him about building one of the hottest Protocols of 2021 successfully pulling off one of crypto's first major mergers leading an organization through controversy and so much more but of all the things I wanted to talk to Joey about there was something

clearly at the top of my list ERC 4626 Willen Pac was what ERC 4626 is and how it came to be during the upcoming conversation but for now all you need to know is that ERC 4626 is a specification that has been explicitly accepted by the ethereum community and can now be considered part of the ethereum protocol and that's why I'm so excited to talk to Joey about ERC 4626 because ERC 4626 not only represents a tool that Joey and protocol needed but it also represents an organic community-led contribution to the

standards and Norms that form the world computer on top of being a successful entrepreneur and Builder Joey has earned one of the most precious titles ethereum contributor while this conversation is a deep dive on all things ERC 4626 including the history the challenges and the future developments it is also a bigger picture conversation about how to directly contribute to and improve ethereum just like it's always been from the start the magic of ethereum is about how a decentralized community can come together to build and I hope this conversation helps you see what that

actually means in practice one more thing before we begin please do not take Financial advice from this or any podcast ethereum will change the world one day but you can easily lose all of your money between now and then all right without further Ado Joey Santoro Joey thank you so much for joining us on the strange water podcast yeah thanks for having me here Rex man I I'm really excited about this one like I have to uh I think your kind of like the beginning of your moment in the sun was like just when I was entering crypto and I remember like one of the more

impactful Bank list episodes I uh listened to was like you um and uh whoever was on the Rari side but talking about that the merger and um then again like your epicenter uh podcast um talking about like just you're that's when I realized that you guys were doing protocol own liquidity and like some of these things I thought were related to Olympus St first so anyway blah blah blah blah blah but I'm just super excited to talk to you and and uh yeah I guess thanks for joining me on the Pod yeah of course it's going to be fun cool so um before I like eventually where we want to get this conversation to is um like how you've become like so deeply passionate about contributing to

ethereum through the ERC process but um like let's like kind of walk through your journey a little bit through there so like number one how did you um find crypto find ethereum and then like maybe talk through your journey to uh like starting Fay yeah so like a lot of people in the space I kind of found crypto early on maybe like 2017 so that cycle so I wasn't like the super ogs who made it in one of the two cycles before that but right around when ethereum and Defi and smart contracts were starting to become a thing I mean this was before even the term defi existed but but there were some cool protocols like maker Dow the Dow hack had already happened so this was like right in like that really

cool time the price of everything started ripping up so um I was in college at the time at Duke and I took a class that was taught by students because this was still so early there was no Professor Le courses I mean there was some in the business school I actually worked really closely with a professor cam Harvey at Duke but there was no undergrad courses taught by professors at that time and so the students taught them because Duke had this school program where students can teach classes so I learned about Bitcoin I learned about ethereum and ethereum always just like captured my heart like a lot of people the idea of a fully compute like you know infrastructure that you can build tokens on open defy whatever smart contracts

all of this um really captured my intellectual curiosity between computer science which was my major and I had a lot of interest in personal finance and Finance in general so from there I started learning solidity started teaching I taught a course actually the same style but focus on development and then eventually you know that led down the line first of all um I went to Stanford and so I want to say we're joining the ACC so I guess we're not Rivals oh hell yeah best conference I know yeah well I guess that's how I feel no too but um anyway the uh so um I and I I've been really involved with uh

Stanford postgrad and something that I've really noticed is that while there's more and more focus in computer science um in like undergraduate it it's not like clear that there's a ton of energy in crypto and like Stanford there is but like the real black hole of interest is in like Ai and um a lot of AI stuff so my question to you is like what in that moment of like undergrad and explore and like you could have been taken by anything from like you know cryptography for the sake of like you know NSA defense stuff to AI to um like you where you landed in this like somewhat amazing somewhat like skevy part of the internet yeah I mean as you

you know you could see by my story or anybody else's story I feel like crypto is the lowest time to impact out of any industry especially in 2017 I mean everything was just written by 20year olds and like kids who had just grad graduated from college and like you know some of the most famous devs were even in high school at the time it was like just a crazy space because uh you know in retrospect looking at all the risks that people didn't talk about um there's a reason why it was only the most idealistic brigh eyed you know people who were building in the space um but yeah that that's how I ended up in crypto I was interested in finance I had a computer science background and I

wanted to make an impact like a lot of my peers and so crypto was a space to do that um especially yeah around that time so that's that's why and now a lot of people are pivoting and doing what I'm not going anywhere crypto is where I see myself for the foreseeable future probably not forever but I still feel like there's a lot of work to do and um you know and it's fun and exciting for sure I mean I think the mark that like the uh this industry is really matured and uh has lost like whatever specialness is left is when like it's not really leaving crypto or entering crypto like we're just part of like the tech landscape you know no one talks about like someone leaving like a

fintech to go to a biotech or that kind of thing or or consumer web to this part of like sa SAS you know CRM it's um I think like the mark of adoption will be that this isn't like something weird and like something for Misfits it'll be like just something that you know is part of a job you take got it so you're saying that that that's not the current state of affairs that's when we that's when we made it yeah yeah yeah yeah got it yeah I I I agree yeah I think uh for now it's like oh staying in staying out but AI is like that and like I think there's some tribalism like that's more of a feature of the internet than like uh you know like if you if you leave a domain of

tech you like you leave Health Tech you leave what I still feel like there's a community around each of these subdomains of Technology where it feels like you're leaving you're leaving your discipline and so tech tech is the subject straight that's the common denominator but the actual applied knowledge and the field is where you get these tribes you get you know whatever and so to me I feel like defi is that it's like Finance Tech but the future of of it's literally the future of fintech in my mind and so maybe we blur the lines between normal fintech and defi at a certain point um but if if someone leaves I I still hope we're sad

you know if someone goes and pivots to like Fred ersham just the other day tweeted that he's going to longevity which I I think is awesome because that's my second favorite thing after crypto but you know still you know we're losing a Titan I guess yeah I know fair enough and I I I'll eat those words immediately I was just thinking about uh one of my buddies who works for like a like a creating tools for Developers for web 2 companies and I just saw him post like that he's like hosting a talk on LinkedIn and it was just I didn't understand any of the acronyms and I'm like you know what I guess like everyone has their audience yeah exactly and yeah yeah that's funny yeah so anyway let's move us back to our story so you were at

Duke you like took a class that was kind of student run then you taught a class that was obviously student run um for how long between like your first kind of entrepreneurial venture and graduating and um you know what what do you think it kind of took to get there yeah so the timeline there was it was my the end of my first year at Duke when I first started hearing about crypto and then I was only there for three years so by my last year I was teaching that course and then um I was also a research assistant for the professor I mentioned cam Harvey um and we wrote a book called Define the future of finance that was

actually my first um public initiative in crypto I guess because before it was like my personal projects and like Duke stuff which is kind of in a bubble um so I worked on that book that was in 2019 where we started writing the first drafts of it because you know defi at that point was just a total Renaissance it was like compound and a and synthetics and all these new yield protocol white papers coming out all the time um some of like the most classic white papers that were not L1 protocol white papers but more like defi layer I think all came out around 2019 in that era um so that was obviously really

awesome and so we took a lot of those ideas put them in the book and then while I was writing the book um I had this idea for a yield aggregator obviously because I was an active compound a a dydx user at the time that that was before dydx did um Futures Trading with Perpetual Futures but they were doing um that like basically exactly what a and compound were doing um with like margin trading and so they all were very similar I was like let me make a yield aggregator and I wrote a white paper and I started writing some solidity um but I didn't have any like full stack experience or front end so I and I was working as a software engineer

at OCTA it's like web to SAS whatever um and and so I kind of gave up on the project because I couldn't make a UI that worked and I had all these like Dev environment issues and whatever but I really enjoyed like the mechanism design the math behind how do we make a protocol that was totally decentralized that you could rebalance and do like a discounted cash flow and the yield update to create a bounty for a keeper like it was no admin keys at all was like the philosophy behind this um it's actually funny that that was my first idea in crypto and then I ended up writing the 4626 standard which would have made the yield aggregator way easier to develop um down now that I think about it it's kind of funny but

anyway Ur launched literally like three weeks later or not maybe like months later but it was around that time became like a billion dollar project or something crazy within months of launching so I was like okay the next time I have a good idea I'm quitting my job I'm going to you know I'm going to go into crypto full time this is where my heart is and and that was kind of the what it took so lo and behold my next good idea was a stable coin um and that ended up turning into Fay protocol and i' I've told the story on many podcasts about how I got in there but it involved like basically all of the algo Stables of late 2020 and how I thought that they

were all going to die and that we needed to make a better one and that that's uh the ideas of protocol own liquidity and then some of the other early Fay ideas that didn't end up staying in the protocol as we continued to evolve um but yeah that's that's sort of the linear progression or maybe it's not linear but that's the progression anyway of how I got into the space fully that's like super cool and because not only is that a you know story of you you know recognizing Trends and like kind of figuring out what where opportunity is and just you know like kind of The Blocking and tackling of Entrepreneurship but uh I guess like the difference between some a crypto Twitter influencer and like a Founder is like

the willingness to and and just like the conviction to take the leap and to invest and like you know put all the chips down on like the thing that you know um is going to change the world and like what entrepreneurship is not really about um like the winds when you're like looking back it's like the the the journey that you took to get there and like how it turns you into someone today so um you know I there's I have listened to most of them there's like a thousand podcasts out there on that you've done about like Fay protocol and like kind of the legacy of that and so love to give you an opportunity to talk about that if you want but um what I'm interested in is like the the thing that uh I guess has been most resilient about the Fay

protocol was um this like ERC for 4626 yeah 4626 uh the Vault standard right and so um I guess like before I unpack uh like why I think that and and we talk a little bit more about that can you uh one say anything you want to say about Fay but to talk about like what was the moment where you guys realized that the problem that you're having is so large that like you need to make sure that all of ethereum like comes together and solves it and this is not just like kind of a product or a feature that you guys need to deploy yeah totally so there there are kind kind of there's two

interesting threads that came together to create the CIP one was my um College dream of writing an EIP from when I first learned about the ethereum process I was like one day I'm going to write one and it's going to be awesome um little did I know and then um but but you know practically speaking the real reason and throughout the Fay Journey um like you mentioned Fay was kind of an Epic Journey there was so many different um moments that the project had good bad ugly and um we really tried everything we wanted to stay on the edge that's kind of always like you mentioned been my um my lens on entrepreneurship it's

making the thing that doesn't exist yet that needs to exist and seeing the trends and seeing um so we had a ton of Innovations in stable coins obviously but also in how Dows can operate and you know some of the ideas were ours some of the ideas were um other people's that we borrowed like optimistic governance was a really cool idea that we took from the gyro stable team and now they're on Main net and they're doing great um so everyone's kind of just like we're all we're trying to put the pieces together to make something that works and um so when we were so when we were building the kind of the the most the best ideas

that we had were the ones that were kind of obvious but no one had done yet so you know in a certain sense like that was kind of the yield aggregator idea like I pitched one of my friends who was a VC back you know in 2019 and he was like dude we get this pitch like every week so it wasn't like a it wasn't like I was a genius for coming up with that it was a completely obvious thing but it was the details it was doing it right getting it out there that and that's what entrepreneurship is so um that was 4 6 26 that was I firmly believe my greatest creation in the project and it wasn't just me there was four other authors from the F Rari team and from yield and from yearn we all came

together and we made this standard that is now being used heavily it's like a huge percentage of dvl is now in 4626 vaults and I think that number is going to be only going up because it has such um product Market fit I guess is not the right term it's like interface developer fit or whatever um but yeah and that idea was something that was absolutely necessary and nobody just really like put their nose to the grindstone and had the I think it was kind of a beautiful thing because between the tribe da Yi protocol and year we had enough mind share and Community adoption and and

distribution even it really is a distribution problem anyone can go write an EIP but if you don't have the connections to the teams that are building these things and the brand to back it up then it's probably not going to get adopted so it was kind of a perfect storm where the tribe Dow is big enough and Ur and all these other you know protocols um and everyone agreed it was such an obvious standard that everyone needed because everyone's rolling and the so maybe we can zoom out but to to to kind of put a pin in this thought 4626 was definitely our greatest contribution and so it's going to be really cool to kind of unpack why that is and how it got there and why it didn't exist before so maybe I could

pause um no for sure let's let's like let's tell this narratively narratively right like so what in in retrospect it's obvious that like okay there's so many that are these like yield Farm like um opportunities let's standardize it and create um a way for this to become like composable and and all the magic that is defi right but um what what was going on in that moment what were you guys trying to build where you realize that um it doesn't like this is a bigger problem than our developers that like can just contribute to inter you know like duct taping a solution that just like gets the thing into something that works for

us like how how do you as a leader recognize like this is something that like requires like the whole community and not like a problem that is within my organization yeah so like I mentioned it wasn't even a hindsight that it was obvious it was literally every single team that had anything that smelled like a token Vault either had already thought about writing this CIP themselves but just didn't actually allocate the bandwidth to do it or they immediately recognized that it was necessary so it was um I guess what I would say is there so I'll speak

generally and then specifically about like The Narrative of how we came up with it um so generally there's two types of people who would use 4626 there's someone who would implement it at the base layer so that would be like a lending protocol like compound or a and the the concept of a tokenized vault was essentially the C token compound came up with the idea of having a token that holds another token um that really didn't exist in D5 before because they were so early comp this was compound V2 and they did a ton of innovation in compound V2 but I think the biggest one was the C token itself where you have a

fungible representation of your lending position um and that is essentially a vault it's a vault that it's a yield bearing Vault that increases the C token has an exchange rate relative to the underlying it increases whatever um and so there's all these implementers a is an implementor but they did rebasing and then everybody all these Sushi Guild Farms are also synthetics had a guild Farm like everybody had a token Vault they all you know did basically the same thing with some modifications but um but everyone rolled their own implementation and that's because like every dev has their style and there's no

like name conventions and parameter choices and you know the idiosyncrasies of your protocol um and everyone could you know congregate on the same standard but everyone wants to make their gas optimization or add some feature or whatever or have some naming that's like legally safe like this is a problem that we have with a where we showed them the 4626 standard and they were like why would you use these Finance terms you should use like token Dow terms that you know are like maker Dow where every word is like nonsense like I suck the vat to rug the the you know duck or whatever like yeah so anyway there's a lot of obvious reasons why implementers don't

um you know don't really they roll their own things so the big piece was integrators so there was if you have like a protocol that's built on top of a token Vault like a tranching protocol where you can have Junior and senior tranches or you can have literally a yield aggregator you're in V3 today and Cove and some other projects are yield aggregators built on top of 4626 um which is a really obvious use case for it so the integrators once they get big enough then people automatically use the standard because you get distribution and Integrations for free

so the problem is is like a chicken and egg it's like any two-sided marketplace where you need integrators to exist to make it worth it for implementers and then you need implementers to actually start implementing it to make it more obvious for new integrators to come in and you know builds and then the ecosystem evolves this way so that was the um that's the lens for how why it didn't exist yet and so in our case um we had so I was working on fuse with some of the Rari devs and they had a feature that they were coming out called uh plugins where you would take the idle liquidity from the

fuse pool and put it into another yield source and the way that they had implemented it um fuse and compound were very close to the bite code limit on ethereum which is like if you're a solidity developer this is like the bane of your existence where ethereum only allows like 24 kilobytes for your smart contract and if you go over that um in terms of code size and you literally can't even deploy to main net and that's not a lot of room especially if you want to have sufficiently complex functionality so um so for fuse they were at the bite code limit and they wanted to add this plugins feature and

so I was kind of hacking away and I was like what if we standardized an interface for this was internal standardized in an internal sense not in like oh let's make any IP sense what if we standardized a interface where we could send the liquidity to a you know to a vault literally that would we could deposit and withdraw from and just abstract away tokens entering and leaving the Vault um leaving the fuse pool um so we have this standard interface and then we develop these plugins that anyone can write and fuse it literally like a Lego you know you plug in the Lego and all the all the plugins would be interoperable across the pool

and it solves the bik code problem because all we have to do is add one function call on withdrawal and one function call on deposit um and that doesn't add a lot of code complexity to the Vault and I still had to like some stuff around because we were that close to the um to the bite code limit but anyway we had an implementation that worked and then we looked at our road map and we had um literally Rari vaults was on the road map so we were going to make vaults that we're going to you know plug into fuse pools which we're going to plug into other stuff um all super fluid collateral you know the kind of 2020 defi summer mindset so the vaults plugged into the

fuse pools and then be because of the merger we had this amazing product called turbo that honestly I'm really sad never got to see its day because I think it would have been um a really big well it also was kind of a zero interest rate phenomenon type of protocol so I guess because the rat's hike you know maybe turbo wouldn't be as successful today but I still think it was a really cool protocol and I don't think we need we could talk about you could go look at the turbo we wrote articles and you know go the repo's open source if you want to go launch it talk to me I guess um but so we had turbo which was also basically like a vault style you deposit your token and start earning yield on it so

that would have been used in the yield aggregator and it would have been used as a plug-in strategy for fuse um so we had turbo and then we had some other stuff down the line that well just like ideas that we might have implemented but that was enough for us we're like we have a vault protocol we have plugins we have um turbo why don't we just write an ERC and then everyone in the ethereum community can write you know vaults that are immediately like they integrate directly into our entire text stack and we just bet we went all in on 4626 um so we wrote the first draft it was like I was literally at home and my

parents over Christmas break or not Christmas break but over Christmas um like writing the first draft of it and on the phone with Transmissions 11 like what do you think about this you know I think we need to add this parameter or whatever whatever we published the first draft in January and then um the standard was final like three or four months later which in retrospect was way too fast for um for an EIP and there are a couple pain points to 4626 that you know every standard does like people complain about erc20 token approvals they people complain about a ton of things about the nft 721 standard so no standard is

perfect and I think 4626 ended up being really great given everything and clearly you know the standard speaks for itself because now all like basically all the Blue Chip Protocols are using it maker da their first class s die die savings rate rapper is 4626 basically everything in the fra ecosystem is 4626 um a has a first class wrapper for it um Ur V3 is literally all 4626 and there's new projects that their entire project is built on top of the standard so clearly we did something right um like Cove you know recently just um

launched some an adviser there um super forms another one that we have the 4626 Alliance I think this would actually be a really good place to plug that which is basically like a group of uh projects and developers who come together to build tooling for the standard develop new standards around it um and just kind of do the nuts and bolts type of work and promotion and marketing to like make sure that everyone's using the standard there's clear tooling information whatever you need so um I've been pretty involved there recently and that's um I still think there's a lot of work to do so that's where that's where I've been allocating most of my time in the

ethereum ecosystem these days but that is that's the history and that's how we got to where we are now in terms of where the idea came from for sure for sure so but because like you say that I think this is uh like you the chef doesn't have an appreciation for like cooking right because like you say like oh it was just so obvious and someone had to do it but like man no no one did it right and I think that the thing that I'm hearing in this um that like was just kind of like a detail of your story but to me says everything is like you running up against the bite code limit right like you had a real problem and you were like first you're like God we we just we need to solve this problem

for us because like this is otherwise we're not going to be able to implement the things that we want to do and then you know because you have like vision and because the enti everything about ethereum is about open source and creating a better world computer it made sense to like move into the scale that's erc20 but um yeah I don't know I I just hearing the history it's like very clear to me that uh that that's a Founder story and it's just um it's ethereum so like not every I mean although you just said that there's an organization so it literally is a Founder story yeah I mean I didn't found the 4636 Alliance actually that was a super form team and um and Moro so they came together um and made this Alliance but obviously as one

of the authors of the standard I got pretty involved um so that's that that's so cool right it's like these guys started this Alliance and none of the 4626 authors were even part of the formation of this project but now everybody's all pretty involved so um and and also there's this kind of funny piece of irony where the the 4626 standard has too many methods almost so for integrators or for implementers to implement the standard they have to write um you know conformate implementation for all of these methods there's like you know I think maybe 12 or 14 methods in the ERC standard itself um no it's more than that it's at least

14 because there's four mutable methods four Max functions four preview functions two conversions and a couple other like simpler ones for like metadata so there's a lot of code that you need to write for 4626 and so a lot of teams who implement it say do we have to implement every method we're running up against the bite code limit so we kind of we kind of created that problem for everybody else um which is which is pretty funny yeah there there I guess there's Lessons Learned there but um you know it's always the answer with computer science right is like if you're running into a problem whether it's with space or with complexity or whatever you just abstract it into a new function and make it a different developer problem

yeah exactly yep that's how we do it yeah cool so um while we're still in this story can you reflect a little bit on like the process to take this internal thing that you're doing to the ethereum community like how did you uh you know I guess first you took it to your community of uh essentially yield aggregators and I'm sure assuming got byy in so can you talk about that process and then how you brought it to the ethereum community and then what it's like to shepher um a change into the ethereum protocol yeah so like I guess I'll start at the very last thing that you said which is shepher a change into the ethereum protocol so there are several different tracks for eips um

maybe the two most intuitive ones are core eips which actually go into the ethereum protocol and change you know the clients have to reimplement to maybe add some um add some op code or adds some logic or pre-compile or whatever those are core eips and then you have the standard track erc's where you've heard of all these different token standards and whatever those live at the application layer they're interfaces for developers to coordinate around um and so I'm not smart enough to write core eips I I can I can only write the application standard style ones like ERC 4626 so um that makes it a lot easier

and I guess reflecting on the process like if you're going to write an EIP writing a standard is a lower barrier to entry because you know all it needs it needs to be well formed it needs to be thought through there there can't be any obvious clearing security flaws or um incompatibilities with other standards but if all that true you could go through the EIP process you you start in draft and then you go to review and then you go to last call and then you go to final um and it's you're basically at the whims of the EIP editors for that process but at least you're not like hanging all of the you know uh um all the client teams to implement some

standard and in the core protocol at all this testing and you know that's a that's a much more intense and all the politics around actually included in a hard Fork you don't have to worry about any of that when you write NC so maybe that that's a a little Alpha on ERC development for you yeah well I guess the flip side of that is that because you're not you know fighting to get it into the you know core like applications of ethereum it's well it's relatively easy to make a ERC as you're saying like then comes the hard part right which is convincing people to actually use it yeah that that's a good point so you actually kind of push the problem Upstream where with the core eips all the leg work is getting it included in a

hard fork and then everybody has to use it unless Circle and tether say no I guess but that's that's a side tangent for sure but yeah you have to actually do the community building consensus building after the fact to get people to use the standard so the way that looked for for us was I basically DMD all of the teams that I knew would have an obvious need for the standard on the integrators and implementers side and the funny thing is that the integrators always said yes immediately they were like oh like this is an no-brainer we're going to implement this in our next version like this is amazing

because for an integrator it doesn't cost anything to build around a standard and then even if the implementers don't use it you still have to make the bespoke connector but you're making a connector that now has Lindy everywhere and someone else might make the connector for you because of the standard so you kind of it's like a vampire attack on in on implementers almost where the integrators are like saying yep we want 4626 and if you don't like it we're going to wrap your protocol anyway so you might as well give it first class support in your next version and we're seeing that now with um you know compound and a where they just came out with a canonical wrapper

and I think their next version will probably just be natively 4626 um if not they'll have even more like first class support same with Lio where rap Ste should be a 4626 already someone's going to make a good one that's going to get used in spark protocol and then you know I think people are just going to be migrating as new versions of Blue Chip protocols and new blue CHP protocols come in there's a slow wave towards the inevitable implementation of 4626 volts and um the cat's pretty much out of the bag at this point that with the amount of tvl in the 4626 ecosystem um and just getting that started I guess was I championing it

you're championing it and everyone's saying oh this is happening so one by one imple integrators first then implementers and the S die so the the happiest moment for me was when y made a big tweet thread that said we're going all L on 4626 I actually quot tweeted it I was like this is the best day of my life um it wasn't actually the best day of my life but it was one of my proudest moments as an ethereum developer um and then maybe the second biggest moment for me was when I found out that the spark die savings rate rapper s die savings die is 4626 and that has over 2third of all the die in the DSR is in s die or I don't know but

it's close it's a huge number and so that seeing that is just incredible because that means that there's a big reason for you know whales who hold a lot of SII to implement the standard and now all these lending protocols where people are using SDI and re hypothecating it to try to get some extra Capital efficiency it basically creates a ton of liquidity incentives for the standard because now you have this big token that has you know a ton of die in it so I mean just to like sum up that story into a strategy like now even thinking about this it's going to sound so obvious so I guess my question to you is do you have any real Alpha on top of

what I'm about to say but um it sounds like you know the first step to creating a successful change in ethereum at the ERC level is one just getting it through the process which honestly is doable not that big a deal The Next Step step is getting it used which is much harder but it sounds like the path to success is to find the biggest guys and then convince them that they need to use it and then like Focus your time on energy on you know like really just the whales right whether that's tvl or whatever your metric is but like convince the top you know Five Guys to use it and then trust then that um that like the benefits that

you knew that you were creating will kind of of uh build momentum and take off from there so does that sound right and do you have anything to add um yeah I think that's that's very much correct I would pattern match it to startups where the Playbook is to like make a product get the product live and then iterate or you can't really iterate with erc's but you can I guess like that's what the draft review and last call stages are for that's the iteration phase where you're Gathering feedback from your potential customers making the changes and um and then the you know startups are just as easy as just like go find product Market fit

it's the same it's the same with the you know that's all you have to do it's just one step um right so that's obviously tongue and cheek but well I guess like last thing in this kind of strategy conversation is how much do you if you have to sequence uh finding you know the implementers and the product Market fit and the yearns of your story and actually pushing the ERC through the process what like how do you think about sequencing that like what happens first is it important to have the partner before you go into the ERC process is it vice versa like how how do you think about that yeah I I think that we're getting into the realm of you know

narrative around a process that wasn't really as thought through as you know like there there wasn't like this like intense strategy around how we're going to get 4626 adopted it was just kind of it it was very natural in terms of the strategy and even implementing the standard but what I would say is that for things that look like this startups writing standards things that require Community require um users and adoption um always go outside the comfort zone for like the biggest reasonable win that you can go for so like if we at draft stage we actually did this we I I I DMD Robert Lesner and I was like hey you guys need to use this standard and he

was like yeah okay it's kind of like at it was like it's too early you know so like compound's not going to go change like or a for example they totally blew us off the first time because they were writing their V3 it had already like gone through two Audits and the standard we just finalized it and we were like hey you guys should like edit your already audited production code to like conform to this they were like like absolutely not right so it was too early for the total Blue Chips in 2021 when the standard first became final so we went to like the you know D5 2.0 crowd right and they were all super down for it because that was the level that the

standard was at it was like people were all trying to compete not compete but like make the best products and gain tvl and whatever so it was a lot of pre-production protocols and protocols that were more like not Blue Chips but D 2.0 or you know whatever kind of Def summer type of projects they were all for it they all loved it because that's where we were at the tribe da right um and so we got all these guys to implement it and then that created enough brand share and mind share around the standard open Zeppelin wrote a 4626 um you know open Source whatever for everybody to use now

it's out of the box soulmate had one um Ur was the first Blue Chip to really put their flag in the ground and that was obviously I think a lot from you know FUBU lobu who was one of the authors of the standard did a lot of internal um lobbying with year and then dant got behind it and schlag and all the other devs for V3 so um once they put the flag in the ground now it's like there's a blue chip out there and they were the lowest hanging Blue Chip you know and then finally maker Dow came in everyone started just adopting um and I think over the next two or three iterations of

D5 we'll see that it'll be pretty much everywhere um and yeah I think that now is the time for some of the newer standards to add more specific functionality on top of 46 26 to keep kind of more utility more diversity of use cases more standardization um I think that's the that's sort of how things ended up playing out well I guess with that as a pivot point like let's talk about some of the um changes you're looking forward to and some of the erc's that you're working on so um like I I know we discussed briefly before uh we started recording that you um are working on I think you said three right so can can

you talk a little bit just about um yeah why what are the things that you're working on and why um of all of the things you can be doing to help like continue to boot up the world computer why these are the most uh exciting things for your time and energy right now so 4626 itself I think covers a super wide range of use cases and there are there are three really like major extensions that everyone's kind of talking about again kind of the obvious extensions um so the first one is having native eth as the underlying asset so 4626 is literally a token container it's a token Vault it's a token strategy

whatever mental model helps you kind of imagine how you would use it but you put a token inside of a container that some yield happens maybe it's you can't lose money maybe you can but it's all denominated in the same you can or can't you know right like the DSR is like risk-free in die terms but maker could blow up while you're dies in there so um there are certain vaults that kind of always go up in terms of the underlying and other ones where you might lose some money because you're selling options or whatever but um having the token standard be a container for other tokens is great but what if you want to use

ether which is not a token it's its own native protocol asset so um for that I wrote e ERC 7535 so that will take um eth as a native asset that one's super non-controversial there's really only one way to do it there's a couple details that are being discussed in the forums but I don't think that one will take too long to end up becoming final and the goal for that one's actually my favorite because there's two major use cases for it one is a new version of wrapped ether which uses 4626 as a container so we is cool because it's so

minimal like rap e 9 is the one that Unis swap V2 and basically all of defi uses um and it's very elegant it's like not even 100 lines um but it's not super extensible and it doesn't have a ton of integration potential because it doesn't have some of the newer things like um EIP 20612 message signing for permitting and it doesn't have you know the utilities for depositing to and from on behalf of other people so it's really minimal for using it yourself as an EA but in terms of integration potential there's a lot of extra steps in routing that's very

inefficient versus being able to add in these extra parameters that are that come by default with 4626 so I've been working on a new version of wrapped ether for polygon for their new uh Paul token on their ZK chain so that's going to be I think you know if that gets a lot of Lindy and a lot of TBL then that might even be able to pour it over to other rollups that are evm um which would be really cool and even cooler than that is liquid staking tokens so liquid staking tokens are literally just just uh ether Vault that earns yield so WAP Ste wreath coinbase

eth all of these should be 4626 um and I'm I'm not sure who's going to implement it first but somebody will and then if they get big enough then everybody will so do we need this new extension in order to like have um to to really like have uh 4626 Vault like represent uh staked eth better or is that just a matter of time um we need the extension yeah because otherwise there the details it's there's slightly different ways to do it and so you have a standard that says this is the way to do it and then there's no guess work so the standard I think was will be the

missing piece hopefully that's that's you know that's the bet got it and so for this one what you're saying is it's so non-controversial and it's so um such an obvious win that like you're confident that aside for some implementation details and maybe some typos or whatever that are being worked out like this is a pretty smooth sale through the ERC process and like are you working with any um you know major implementers to like to show that this is needed or do are you able to just communicate that via what the ERC is yeah I think it it kind of speaks for itself and the forums There is almost no there's a couple questions and but the discussions are really focused on like

you said the minutia um the court the need for the standard and the main interface and sort of strategy are all super clear and I think consensus um I think that the hard part is really going to be actually getting these you know Mega liquid sticking tokens to actually implement it so that's you know that's the fun part that I get to work on let's uh let's call Sam kazemian because I don't I'm not sure if they've released fra eth V2 yet I think there's still time well Stak fra e that actually is 4626 but it's 4626 on top of fra e so if they they have like two liquid staking

tokens um or they have one I guess eth derivative called fra e and then they stick that one so um and that's basically the same model that we have with Lio with the caveat that I'm not sure if Frack E3 bases or not um but anyway yeah so with Ste it does rebase but with fra it doesn't so you have to go stake it but the staking of it is 4626 so I think that that was probably their way of getting around the standard because otherwise there's I don't know if there's a reason to have a eth derivative that doesn't rebase but anyway we can talk to Sam about it I guess no no I mean you're you're right

that um because of their construction which they do for economic reasons and well they kind of uh hack their way around this problem that you're just going to solve at the ERC level so anyway I think we've beaten that one to death what are the other change the other extensions that you're building yeah so the there was another one that the centrifuge team was working on with super form for asynchronous vaults that have a two-step deposit and withdrawal process so you basically request a withdrawal or request a deposit and then it gets executed on the back end or the the standard is actually not too opinionated on how the two-step process gets done it just provides an extra method

for initiating the two-step and then um introspecting which stage you are of whether the the request is still being pending or whether it's claimable and then finally you can can execute the claim once it's claimable to complete the process so um it's an asynchronous asynchronous fault so the idea here is that you might want to implement a vault in which today the only way to do it directly through the standard is uh like kind of you do deposits and withdrawals but maybe you want to say like a deposit triggers a one week like unlock process and this new extension will build that

directly into the standard is that what you're saying yeah exactly so this is useful for primarily real world assets where there's some centralized entity that has to go fulfill a requests on the back end and there's not immediate liquidity and the core token or um again liquid staking tokens so you actually need both standards to do a liquid staking token right because 7535 on its own is basically just wrapped ether or like compound Style you you can use it in lending markets and stuff but if you have a withdrawal delay like you have with Lio or any other liquid staking token you need to have a request for a withdrawal and then a withdrawal so it's

literally a two-step withdrawal process and so when you combine these two standards you get a liquid sticking token standard um so that that's kind of the vision for both of them and I think obviously liquid sticking tokens are going to be huge in the next wave of defi they're already huge so having some extra standardization there I think can only help do you foresee that being uh difficult to Usher through the process is there any controversy there yeah actually there's a lot because asynchronicity is very difficult to implement and a lot of teams have been thinking about since the publication of 4626 they've been thinking about how do you do a two-step 4626 um so a lot of teams are like well

we did it this way and we did it this way and and you know really the whole point is like coming to truth on like what is the the correct set of engineering tradeoffs for Elegance for Simplicity if your production implementation doesn't work sorry it just has to work for the next version um but if you have some unique Insight that makes the standard better then it gets included and that's the kind of the beautiful process um that happens with the eips and it happened with 4626 too where a lot of teams were like well can you add this thing that we have and sometimes it was a yes sometimes it was a no cool all right so uh what's the thir and like the third extension you're working on yeah so the third one is actually um it's a meta EIP so it's an

EIP about extensions which is the is the first one that I've written and this one I actually I'm getting I'm getting a much deeper look at the EIP process from the perspective of an EIP editor by trying to change the EIP process itself to include some definitions and some extra boiler plate around writing an extension because 7535 is an extension 7540 is an extension and in a certain sense 4626 is an extension of erc20 so um this meta EAP defines what makes an extension and it adds some extra heading and metadata and

conventions for actually writing an extension so um it's more of like a cool meta EIP that will make future extensions easier to write um I'm not even sure if this one will get included in any like I think that what might happen is it might end up turning into a smaller edit of EIP one so the only EIP that's allowed to change in any meaningful way is EIP one every other EIP has to become final and then stay final it's like sort of immutable in the same way that the blockchain is immutable um but E1 is a living document that describes the most upto-date EIP

process and so if you want to change the EIP process or add a category or whatever then you edit EIP one so this last IP might actually turn out to get incorporated into the living erc1 which would also be really cool no first of all just on a personal level that would be like like forget you know signing into the blockchain forever like signing into the pro into E1 like that's huge so uh good luck for that and it sounds like that might be the appropriate place for meta EIP anyway so um like it it's just interesting to hear kind of how all these things come together yeah exactly and all the C devs are really you know

eager to give or not yeah eager maybe is the wrong word but they're extremely helpful with feedback um very C did very um they've seen everything so seeing putting your their hat on is very helpful for um learning about the EIP process seeing into the raw decentralization that is ethereum so I guess with our last few minutes here um as somebody who has so much experience like working you know through the process to you know actually implementing to um getting other protols on board to now to the point where you're writing meta eips and introspecting on you know what the

process is um let's say taking like a young Joyce and Toro from three years ago uh as like your target audience but really anyone today who is trying to who sees a problem and thinks this shouldn't just be something I solve this some this is something that all of ethereum can like really benefit and get like a 1+ 1 equals 3 moment from like what are some like core insights and advice that you would like like to share with anyone that's trying to change the chain I would say that I still believe that crypto is one of the quickest times to impact where it it's truly an idea meritocracy there's this culture of if you make something useful people are

going to use it they might even Fork you and compete with you you know it's it's like it's like the platonic form of meritocracy and competition and and sort of an economic sense but it's that's very great for you because if you have really good ideas and you think that they need to exist this is the industry for you like get in there write an EIP or write a protocol write a white paper circulate it um everyone's looking for Alpha everyone's looking to boost each other up like the space is just here it's sort of this beautiful um this beautiful Community where everyone's working to increase the value increase every all the efforts

that we're working on so um you know I think there's some really positives there like you go in you can build um and if your idea is good then it will get adopted and then you'll also learn if you have an idea why it might not be a good idea you'll learn that really quickly too and then you'll you'll you'll be smarter for the next time that you have an idea so that's sort of the beauty of of building in the space and um I think it's a great opportunity for anybody who's interested in it yeah and I think I think you're so right to call out that this industry specifically is the the industry for people who just like need to change the world and

there's like so little barrier to entry and um you know the through my personal story and like through the the lens that I see that is this is the only industry that you can like enter the inner Circles by like starting by writing threads on Twitter right and I don't know if that's going to be possible in the future just because I don't know if Twitter's going to be here in the future but uh I do know that wherever we're con congregating as a um Community there is an opportunity for like the next person to just start creating Contra content and contributing to the Zeitgeist and like that's whether that's like my story or many of the people interviewed on

this show like that's vitalic story like literally his dad gave him like a some information about Bitcoin and he started here by being a like writer and editor for Bitcoin magazine so um whether you approach it from like the the technical side or the content side or whatever like what is actually special here is that the the distance between like the periphery and like the the molten core is um it's infantes compared compared to the rest of tech and the rest of uh Society so man Joey thank you so much I I really appreciate this talk um when we didn't even get a chance to talk about like kind of what you're working on today and what you're excited about so um will you

just give the audience like a little bit of um like how how to find you and uh if they want to follow more of what you're doing like just the the projects that you're putting your time in yeah so my Twitter is Joey Santoro eth and my telegram is Joey Santoro and my GitHub is Joey Santoro and that's where I'm that's where I'm the most active um so you can DM me you could follow like what pull requests I'm making and whatever because really right now I'm kind of living in the 4626 Alliance where you could find that um that telegram chat ERC 4626 on Twitter links to the telegram join there I'm pretty active um and yeah that's what I'm I'm working on

these days is like getting all these open open source ideas and standards that I had in my head since 4626 was first written out there and then we'll see what kind of projects I find myself into after that um but that that's where I've been kind of doing most of my stuff recently and that's where you can find me yeah for sure man you got to get all the lessons that you learned like building the last venture out of your head and into the The Ether if you will so that uh you got space for the next one right and like as you said in your story like last time you wrote a paper urine came out a month later and you realized that like every time you have a big idea like you got to jump off the cliff so I'm just like really excited to

see uh what the next jump is for you man thanks Rex yeah I'm excited too and thanks for having me on it's been awesome jamming with you yeah for sure man uh like really appreciate learning about uh the ERC process and uh can't wait to have you on when you start your next venture so Joy thank you so much and uh talk to you soon man talk soon n