Ethereum Enshrinement 101 | Round Up

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another Roundup edition of Bel curf you got Mike and miles today just just two Lads hold it down the two of us just the two of us getting cozy on a nice Thursday afternoon fireside chat little F little fireside chat yeah just picture

bye Fire War warm mug of Coco it is the first couple weeks of fall which is which is my favorite season um we thought we'd mix it up here a little bit and actually not really discuss any of the news that's been gone on this week it's been a relatively slow week the only thing that's really happening on the news front is the FTX trial and Saga and I don't know I'm I'm feeling a little bit overwhelmed with the uh the constant Deluge of of little facts there and I think the the CT coverage of it has been basically a historic low even for crypto Twitter it's been it's been bad so we could just skip that and instead if if you're if you're also sick

of that just like just like we are I think maybe um we can zoom out and actually a debate about just a more of a debate sort of episode where you know one of the topics that I think is the the topic dour in in crypto right now at least in ethereum land and I think in Cosmos land as well is enshrinement enshrining things and I think this has been under the radar something that's being discussed more and more back at ECC in July if you went vitalik actually spoke um a couple of times about the trend of enshrining coming back he just recently wrote a blog post talking about should we be okay with enshrining more things within ethereum and you know we talked about this in a little bit in last week's Roundup too so you know bear

with me here if this is repetitive for you but it was a very instructive post kind of on the the original philosophy of ethereum of not enshrining things not putting things within the protocol similar to the Unix philosophy and instead pushing complexity out to the edges you actually walk through the history of the many attempts to enshrine account abstraction going all the way back to 2015 or 2016 to demonstrate how difficult it is actually to enshrine things in the protocol even if you can decide as a community that this makes sense and we can get into some of the pros and cons of enshrining and why it makes sense and why it doesn't make sense but miles you actually have a great analogy I think for for how to think about this and I've increasingly

started to think that when people talk about enshrinement it's sort of ships passing in the night and people are using these very different arguments so you have you have this great framework I'll just tee it right up to you if you want to give the folks the two ways how you think about it yeah absolutely and I think like the big question I'm trying to you know poke at here is really around does credible neutrality which is really what has been the optimized for at this point you know mean letting everything go to the private Market um and I guess the way I'm you know I've observed it there's two very different ways of of thinking about this topic um and although they kind of get to the same place and one is okay let's you

think about ethereum or any blockchain like as a you know should be basically treated like a a government treats its you know it its country um and you know from that perspective you could argue for if you're a proponent of enshrinement um hey it's not great to let everything go to the private Market um there are certain services that lead to Natural monopolies and if you were to let the private Market you know completely capture something like utilities uh that would not be healthy you know for the underlying ecosystem right and so maybe ethereum should be you know selectively uh pick a few areas uh that it believes it should regulate or or

even nationalize at some point um you know for for the greater health of the ecosystem um and you know I think the push back here has been like well that's sounds like communism to me or nationalizing you know businesses or like what's what sort of precedent does that set you know that's not healthy right for for for attracting future entrepreneurs um and I think that push back's like totally valid as well um then there's a very you know opposite end of the spectrum uh way of looking at this which is to think about you know ethereum more like operating systems um and you know I think what we seen with apple and Microsoft I mean these big operating systems did bundle many

first-party apps into their system right so these are like things like browser or like the calendar or even or even like you know iMessaging with apple um and I think you know this and when you say first party apps there miles just to underscore that would be like if windows or Microsoft designed the operating system Windows then they would also create like Outlook things like that the basic exactly Microsoft Office right um or you know Apple ey message right and I think that this is it to some degree to protect their users again because like relinquishing this control to the private Market could lead to worse user experiences but it also is effective in deterring competition um and of course like

Microsoft went through all that antitrust stuff because of it they definitely took it to the to the nth degree uh of bundling things um but I think you know whether you're looking at like an operating system or or a government you know I think that that is the the big question is like you know do does like do we can we retain this value prop of credible neutrality um that attracts entrepreneurs and and you know reduces platform risk it's not something they need to think about while also you know not letting everything go to the private Market um are there things that we can enshrine that's the word we're using but really it's kind of like building a first-party app in my eyes um

that makes the rest of the ecosystem net better um and still you know leaves plenty of ample room for for the for third parties to come and innovate and and build you know and drive value um so you're not driving away entrepreneurs but you're also you know giving yourself a little bit of a competitive mode um under the guise of also protecting users um and so you know from that perspective I could think it's it's interesting we haven't seen you know more inment right I think like we're coming out a pretty extreme degree of like you know credible neutrality optimization by not doing any of this right um but now people are starting to question it that as the private Market you know winners have

started to emerge and saying okay maybe this isn't so healthy for the rest of the underlying ecosystem you know whether that is Lido today or igen layer you know tomorrow um if there are things that are super close to the metal like should we be pulling more value back you know first of all into the chain more control into the chain um and if we do that does that actually deter you know future entrepreneurs from coming and building third party apps which we absolutely you know that's our main value prop right we're selling block space for for applications um so that's kind of the way I'm thinking about it it's two very different views um and I think there's like valid push back and and support you know based off of which which angle you're more coming from so I

I I really like that way of thinking about it the and but I actually would poke at you and maybe challenge the idea that those are very different I think the United ing principle is good user experience so good user experience from the pers perspective of a citizen in your first example of a country nationalizing like a banking system or utilities or something like that or good good user experience from the perspective of using an operating system so from the perspective of Windows like one thing that everyone is going to do right is try to use email so it would make sense to like look maybe this isn't the thing that we take our rake on and make a bunch of money from it's more important to us that everyone has this basic service it's very safe you aren't

getting viruses transmitted to you it's not buggy and it just works because if that basic utilities work utility works then it's going to lead to all of these other profitable activities down the road same same thing with the with a country actually they're and this is where there's a little bit of nuance between regulation and nationalization so n like there's sort of like a couple things that countries do which is provide free goods and services they're not really free you get taxed for them but uh that really really really actual public goods right like like building roads uh the post office things things like that um then there is then there's regulation which is to say look in your example of utilities if we just let there there are just the the Natural

Market Dynamic of a utility is that there's a natural monopoly there so what we don't want is for people whoever becomes the one supplier of power in a big ribbon area like New York to just be able to gouge everyone and charge them so much that their Max iing their profit but you know 10% of the city is without power or basic goods and services we just don't think that that's a good thing we're going to improve the basic user experience of people who live in this in this area and and just not allow them to do that and then that actually should be like a net good and pay dividends back for people who create businesses in those areas and all those other things um nationalization would would be an example of like a government that wants more control over its Financial system and takes the banks

under their wing or in an extreme example if your financial system blows up and the government has to come in and save parts of the financial system like Fanny May and Freddy Mack so we've actually sort of done that to a degree in the US and that's probably that is s sort of to your point how I was thinking about it before I do think the middle ground here is some form of Regulation and I think even going back to season two of bell curve with did a great episode with Larry did one with hu as well which provided this framework that I think is pretty accurate which is the governance should fit how close you are to the metal so like ethereum governments super super decentralized one level up is probably Lio and that should be because

it's so close to the metal it should be almost as flat and decentralized as ethereum itself now I guess the question that we're really getting at here and the Crux of it is is like what is so close to the metal that it actually should just be directly controlled by ethereum and that is what I have less of a solid answer for yeah EX exactly um and that is a super important Nuance like if you can create elegant you know regulation that doesn't need constant governance like that's very different than operating what would otherwise be a full application right and being opinionated and saying this is the only version of this that you can use um and I would make this like slight differentiation where you know you have regulation with utilities which keeps their you know restricts there from

being like one electricity provider that you know the entire country uses right right um and so you have like a variety of them and they're Regional that's that's healthy right um but you know if you're like using Microsoft and you're using Microsoft Office that's literally like you know you've got this one choice this is what you're going to use um obviously just more browser like based ones now today but but that's essentially the line here um and yeah with something like Lio it's it's a question of sure it can be like as flat as absolutely possible um you know if even without any sort of enshrinement and that's what they're going for right um but I think then you still the concerns are coming from okay

that's still like one electricity provider that still is providing you know powering the entire country right and they still have that ability to to enforce pricing you know price gauging and like gouging and like you know unhealthy things right um and so with the LSM the liquid staking module that that we talked about um you know it's first of all possible um in Cosmos because uh it Cosmos has governance first of all and it also has delegated proof of stake um and so I think that that's the next question is okay if you want to go for this middle ground or frankly the national nationalization like ground or like the first party you

know whatever like perspective you're thinking about it from what are the downstream implications of that for ethereum um and if you do add something like any kind of formal governance um or you know delegated proof of stake like what are the trade-offs with that um does that start to you know potentially pick away at this ultrasound money sort of the value prop right like the more complexity there is and and you know control there is in the protocol the less of like a money meme you know ethereum becomes right um and I think it's always been trying to strike that middle ground where it can you know compete with Bitcoin as a as a money but also be this operating system um and I think we're now getting to the point

where that actually hits like serious tension um where you know if you are going to try to compete with Bitcoin then you you know you're gonna have to make tradeoffs like sacrifi like relinquishing that control of the private Market completely or you say like you know at the end of the day I think we can still this can still be money with there being some form of governance or control um and yeah no I think think it'll be interesting to see where where it ends up playing out um I have a hard time seeing ethereum Implement token governance in any form frankly um me me too and so you know I think that anything that requires that is is a bit out of the equation I think that it

seems like delegated proof of stake is becoming a little bit more of a viable option uh or at least I've seen it you know I've seen it thrown out there in a couple of the solutions that are being being proposed here um and so yeah I think some of that is also worth keeping in mind here is like if you do decide to you know tackle the Lio problem what other problems might you introduce right um that that could potentially undermine like the objectives yeah I think that that fundamental tension is the the one that I think about too which is the trade off with enshrinement is complexity the more complexity you take on you know the the

cost of that is you need you need governance you need a way to manage all that complexity one of the things that I think has been strongest for etherum and Bitcoin as well for its Comm commodity moneyness whatever you however you want to describe it is the fact that there there isn't this it's not like a company it's not like there are shareholders that can vote and it's just this thing that gets sort of decentral uh gets coordinated around which looks very commodity like I think the more that you bring within the protocol the more complexity you ask it to absorb eventually if it's doing enough people are going to start to be like all right who is making these like many decisions are being made now I understand this who is making these decisions and what is

the process and I I do think there are guys like I've heard John Adler use the exact metaphor of regulation in the past and one one soft you know it doesn't often get thought of like this but you could think of the EIP process as a part of one component of regulation in a way they're framed as improvements but they are things that you know the the clients will have to implement and gets brought into the protocol so I I think it's worth considering and formalizing more thoughts about how regulation your know regulation looks in in a crypto and in an L1 sort of environment but then it is worth worth looking at how governance is going to look and this trade-off between the more

human decision that's around it the more it's subject to change yeah the less looks like a commodity and to the bitcoiners credit they saw this coming from light years out these debates were had a long time ago in 2012 2013 and they saw a lot of this complexity coming down the road and they said I don't want to deal with that we're not gonna deal with that and I'm a little I mean I'm a little biased I would have preferred to have this problem rather than bitcoin's problem oh yeah me too at least there's things happening um but now you have to kind of accept that you know the realities of those of those tradeoffs and like maybe just to give you some like one idea of like how like regulation that isn't opinionated at you

know in terms of like impacting the apps could look is you know you can like the liquid staking module it could add the ability to basically natively mint some sort of uh delegation specific LST so this is like an an nft right um and from there you can then take that n and give it to one of these third party liquid staking providers who pull it but the regulation is that you know you cannot mint like unlimited lsts with one um uh validator unless they continually increase their their minimum Bond right uh that mitigates the principal agent

problem so you're saying okay we're not GNA this this like reduces the risk that all of the state gets delegated and minted with one validated that can then you know basically rug the protocol but we're also not going to like so we have a healthy like distribution of stake at the delegation level but then we're going to let the private Market handle you know how to pull those those nfts in a way that like keeps them brings them back to fungibility right um or with igen layer you could make the protocol aware of basically how much of the network stake has been restak and cap that right so then maybe only like if the network now knows that you have you're reaking you know to an AVS or

something else it can say okay out of the entire ethereum stake X perent is restak we want to cap that at like 20 25% um now the bloat that this would add to governance is that you'd have to be like constantly re-evaluating all these parameters and you would have to be you know basically doing a hard fork or a soft Fork like an EIP for every single one of the these updates right so let's say like oh we got comfortable with the liquid staking cap at you know 20 or the minimum self Bond at you know X parameter right well what if we want to bump that up a little bit right now so regardless of what you do and like whether you nationalize it or not you you are adding like governance bloat um

but is that you know worth it in order to make this like the benefits of a healthier ecosystem so we could end this endless debate um you know what does that actually look like and I think that that's maybe the one thing missing I think from these like Lio debates is okay can we all agree first of all that like social shaming is is not going to work here and so if you really want to think about this in like a practical way it has to be something at the at the protocol level um I don't hear anybody really talking about those Downstream implications of of governance bloat or of of you know delegated proof of stake um we've heard mainly just like you know

social pressure and now we have a vampire attack but you know any anything at the in protocol like level I think has has yet to be like really really explored yeah the I think this is where we we've talked a little bit about this this is and this person's been referenced on the show I don't know who guart is but what a joy what a joy to get brought to CT very someone drew like this vend diagram of people that are smart and people that are funny to try to identify who it was and it's clearly someone who's in the know um but they've got a good sense of humor as well but that is where this kind of meme around the UN alignment police because just rubs you the wrong way you know I I been on the show been saying I think it's I I

genuinely think it's very well- intended but I do think it is always going to rub people the wrong way this like kind of the dynamic of social shaming is just or it just reflects a disconnect um you know between I guess whatever like that you know those those values are and what they believe like ethereum users will do and and what's actually happening on the ground right um and so you know it's just kind of pointless to to to keep like you know yelling into the void really from from that side uh when when you can see like in the data what the users you know what their like social layer is right and I think that was that was that was the gour bomb last night it was great I I I agree but I but

I also think maybe to take the other side of it just for a second I the other side of this would be that you know for many years there was really no reason to use ethereum unless you really believed in this stuff like I I do think ethereum is here today because of those people that believed in those values so I can see if you're one of those people who just deeply deeply cares about it and I I do care about these things too I would just be like come on guys like this is this is what we're built off here right the success responsible yeah and one one thing I've been thinking about a lot is this people love probably because this whole Space started with Bitcoin which was exp explicitly out to be a form of money and now there's this ultrasound money meme

and ethereum I my personal my personal thought is that it looks more like a an a commodity like oil or something like that than than a more traditional money but I do think the question is if in the word in the ways of money is how do you get people to use this stuff and really believe that it's money you don't have the the luxury of a government of just you have a monopoly on violence and and you you get to force people to to use it and force people to pay their taxes in it and it seems like the organic answer that crypto has landed on is to basically form a religion a like a commodity type money which is enforced by religion and I'm increasingly

starting to see the l1's through that lens because you know like there are people that have been crypto for in crypto for much longer time than me but I've been for six years now and I you know what I go through the I went through the same process that many people do when they first get into this space Oh it's so tribal it's not going to be this tribal forever you know it's going to get less and less tribal and that's just not what I'm seeing I think it's if anything every year that I'm in this space it gets more tribal it gets it gets worse I think yeah and it's and you know some the other thing I hear people say sometimes is you know that's just on crypto Twitter that that's not really what it's like between Builders it's like kind of but kind of not actually

like there are some de like good friends in of mine in the space who I know I just have to be a little bit like yeah I'm in this camp or like no I'm actually I'm really in this camp and and yeah it's it's just as someone who you know I I look at this space from a media standpoint a lot and yeah you I think you just have to acknowledge that there are these I mean even just look at how how separate of a camp Bitcoin is in these days it did not used to be like that even two or three years ago and now it's like might as well be a different industry might as well be an entirely different industry so I don't know I I've increasingly sort of started to look at these things like I probably think the tribalism is here to stay and

I think that its evolutionary purpose so to speak is what ethereum alignment is getting at which is the enforcement mechanism for using these forms of commodity money is a religious like devotion uh to to an adhered set of values so if I had to guess I think that's actually more of the I don't know if that permanently but it's more moving in that direction it seems like yeah I mean I guess my perspective on this is is more coming at the angle of okay what is the most scalable way to make ethereum you know money I think it's by making it like the best possible operating system to build on and in order to you know interact with this

operating system you need ethereum right um and so if that's I think that to me is kind of how this actually you know scales long term rather than I think where we get in trouble is when you start to question how it's being used right um and that's what that's what's starting to happen here I mean at the end of the day all activity you know is is good for ethereum's moneyness right um and I think the second you to get super too opinionated about how it should be used and whatnot then you start you know putting people you know pushing people out right that that don't want you to like have opinions on this you know

operating system if credible neutrality is kind of like you know your your value prop um yeah and bitcoin's interesting because Bitcoin in some ways has like you know has cut itself off from the rest of crypto and and it's taken tribalism way too far and taken its you know opinion Nation way too far but then there's also like a massive class of holders that are you know basically treating this like a macro asset like I don't think Paul tutor Jones gives a about like bitcoin's you know like the the debates on Twitter and like the blocksize wars and stuff like that except in the context of like does this make this a better macro asset that like you know the reason I'm betting on right

and so in that sense it it is interesting how that played out but ethereum I think is is very very different um and ethereum's bet is you know based off of like people actually using it for applications and so they need to be even more careful about being opinionated about you know around how people use this right um because if like that that will deter that activity yeah on a long enough time Horizon I think they're like it's not surprising to me that the Paul tutor Joneses of the world are more interested in things like Bitcoin than ethereum I'm I'm just specula he just talks publicly about because I I feel like Paul T Jones is the type of investor who is money on bonds Commodities a much more traditional macro sort of guy and and

Bitcoin just so neatly fits within that story and that's what I think Bitcoin basically needs to succeed at this point it's cut itself off from the rest of crypto and its success will be determined by you know big institutional buyers buying into this store of you know digital Gold Store value type narrative I think ethereum has a totally different path and way of success and it probably does look more like the sort of Reserve asset of crypto economies I would say and I think that the sort of investor that it will appeal to look more VC is in nature not not exactly but but more vcsh in in nature this is a little bit of a weird spot because I I I do think of ethereum

as a commodity I don't think ethereum will appeal as much to traditional commodity type investors because it's so Tech platform nature but at the same time it's hard for me to really just see VCS just buying and holding eth either they invest they're Equity investors is it interesting spot yeah I think you could treat it more like an index on all the applications built on top right and and that's that's kind of I think the mindset but it's definitely more of an equity growth mindset right um and I think that that's really where where we're going and it's I could not agree more that's why it has a very different you know class of like stakeholders and investors and and frankly way more from the VC side um because you're you know

whether you're holding ethereum or you're like just working in the ethereum space for the applications and trying to identify the big Winners um you know that's a very different mindset to your to your point um so so one sort of related but a little bit little bit of an orthogonal Point here that we got I we have a buddy uh who's just making me think about this and he is think with without you know protecting the names of the innocent here but he's thinking about launching a a crypto game and or it's a game that has crypto on the back end so it's a cool game too built like a little bit of an MVP messed around with it and his idea was basically to just abstract away all of the crypto nature of it um so you as a user basically

wouldn't even know that you're using crypto and I could be wrong but I I actually wouldn't do that I would lean more into the I would look at your audience as people who have crypto and want to spend like their eth specifically that that was my i' I'd be curious what you would think about this especially with you in an investing seat but like I would kind of think of your target market as people that have ethereum and want to use it to do fun things that will promote ethereum and like people can spend their ethon um yeah this is not this is not probably a permanent state of but I think there is a very large Market out there friend Tech is a really good example of this friendch clearly they they they did not

take the approach of let's build a social app where crypto is totally abstracted and no one know I actually think that that is probably right in the very long term but I think that messes with you as a crypto entrepreneur I don't think that I think friendch had the right Playbook here they're like my market is people that own eth and they want to do cool with their eth and a cool thing that you can do is take some of your eth and use it to bet on friends in the social app and I think that and to you know I've I've pushed back a little bit on this whole e ultrasound money meme but you know people do I think I and I I wonder this because oftentimes you hear like oh it's a better ux to use usdc and that's what is being talked about over in Cosmos I'm

kind of like I don't know about that I'm I actually wonder if there should have been more of a leaning into Adam and promote because the the flywheel that ends up kicking in that ethereum has just done so well on is cycle starts people hold eth eth goes up 20x everyone of those holders gets much more wealthy which a makes you more predisposed to the ecosystem kind of Unites everyone's incentives B some of those profits that Capital gets rolled into new businesses that in in turn make eth more valuable now there's reflexive down cycle of that on the other side but that is a powerful flywheel and I just be curious what you what you think about that whole yeah I was gonna I was gonna point out frch too

because think you know if you were like there would have been many Founders that that look at that and say this is I'm building for the masses with this with this app um obviously we like you the masses use USD or USD like predominantly why the hell would we make them go buy this ethereum but I think you kind of to your point like first of all you're probably overestimating the amount of like mainstream people that would be your over like early adopters sorry and you're underestimating like the virality benefits that you get around you know even something as simple as you know using eth as kind of like the main currency in there um now at the same time like you definitely don't want

to you know bar yourself or like add any sort of friction or ux to people that that may not be you know have have it like eth right away right and so if I don't necessarily like I I I do agree with all those points I think that you know if you can add additional optionality to some of these apps then you know that's great too I mean it's all just going to get swapped back to eth anyways but yeah I think this kind of plays into this idea of you know alignment as a GTM um hack if that makes sense um and I think that we see that to varying degrees whether it's you know a rollup framework that wants to be like the most eth aligned rollup framework um

you know we're going to despite like the additional costs like we're going to use it for da and settlement right and we're going to get all like the political figures to come out and support our our framework as like the one that's most align with our values um and then you know we're going to have like eth be the gas token rather than you know using like for example op or ARP as the gas token um and so yeah I think I think we will get to this this challenge of like um you know it that it actually happens every cycle where you know you you can risk by by putting twoo big of a like early focus on on kind of like the bigger picture of the mass market and not just if you want to be like I'm not just building for crypto natives right

um then you risk building for nobody um but at the same time you know I don't necessarily like support projects where like the biggest version of it is is really just a d gen tool that like is only appealing to Crypt native folks today um and so yeah I think I think it gets into some themes around like you know using speculation as a tool using like you know eth alignment as a tool um and it will be very interesting to see just where these you know how successful these these are I I agree I kind of AG I mostly agree but I would say in the beginning in the very there again it all comes down to

sequencing right I I think eventually you need to be building with a product road map towards the future where you do not have frictions for people that don't already own eth or sler or Adam or whatever but I don't think you I think you should be optimizing for those users in the beginning and you know what I mean and one of the things that I've been thinking about because it actually is relevant to this guy's app our friend that he's developing but it's relevant to friendtech 2 one of the one of the superpowers of or one of the very unique things about building for people that own a lot of of eth is that they aren't subject to the same restrictions in

payments that a regular user would be like it's much easier not necessarily on eth but on rollups or like once we solve or move past some of the gas fees like it's just way easier to do payments like probably 10 to a 100 times easier to do payments for things in app in game micro pay things like that and frch are really interesting like French's actually a great example an app and by the way I say this with like I'm not really sure I love the idea of being able to bet on your friends but just what they've done I I don't think you could do that if everyone is just hooked up to bank accounts I I just think the the payments back on the loan of that would be uh almost a non-starter so I just think that probably is a superpower

something that's very differentiated that a crypto user has is this really lack of restrictions around payment yeah I think that's fair when you don't uh necessarily have to like go back into another uh fiat currency to close the loop uh right you know or or even just start the loop right um no I think that's I think that's totally fair that said again like how many people are are willing just to never close out Loop and just you know continue accumulating eth like I think that's the risk you take on but it's you know it's a much easier problem to like basically get that early adoption and then open up the possibilities like open

up more options later than it is to like you know ignore that this like early adopter market and you know find yourself in a situation with no pmf and like having to figure things out later um yeah so I I think I think it really does like come down to sequencing um and yeah I think that I think that makes a lot of sense um how big do you think that market is just out of curiosity like and when I say that market you know how how how many monthly active users do you think there are in something like Unis swap which is which is probably the best proxy that you have for relatively active onchain people today yeah so F

Tech's at like 15,000 right now of Unis swap uh I would put it in the in the tens of thousands but I'm not you know I'm not positive on that it could be much much lower in monthly or daily monthly I'm not sure yeah um unique users repeat users I frankly it's probably under a 100,000 yeah I'm looking at oh wait this is a little bit out of date but yeah around I'm pretty sure I looked this up recently it's like might I think it's even lower than frch I think it's like 10,000 or something like that it doesn't doesn't shock me yeah so it's a it's a small Market size but that it seems like that is the you know a user isn't a user

isn't a user it's kind of like the users that are still left using onchain products are very it's there's not a lot of them but they're probably relatively high value I would guess probably more than the average user in terms of fees that they're willing to generate money that they're willing to spend highly engaged pretty valuable users actually if you can retain their loyalty which is yeah which is the trick right right in some ways they're like extremely loyal because we're still using the crypto apps like today after all the that we've gone through but at the same time like within crypto the switching costs are quite low um but I think I think that brand does play a huge a huge component in that like stickiness even

within the crypto native users um so yeah I think I think that would be interesting I also think that there's maybe opportunity like at some point to have you know in platform stable coins that are kind of like wh labeled or or maybe even and just show up as USD but you know I think they're like owned by the protocol or by the application so that they can like retain the you know the business model off of that um and then send it back out you know convert it over to usdc on the way back out but yeah I think I think that I could totally see basically like a lot of these apps having a toggle between like do you want an eth denominated app or a usdc denominated app um or or a USD call

it in just abstract way whatever St one that is and um yeah I think that's probably the next step here all right I I do not mean to dunk here at all but I first of all I I completely agree with that I think what was the name we were talking about bridge bridge xyc which is a very very very interesting very cool example of this the give me two seconds I saw you might have seen it as well someone tweeted out this user experience of what it was like swap into basically stables around Cosmos oh that was that was Larry yeah um was trying to get into the the the neutron like wrapped Ste pool it's hilarious

yeah it's it's a hop it's a hop skip and a jump uh to get there there's a there's some wrapping there's some bridging there's some swapping you know it could be improved it could be streamlined uh just to across the Atlantic Ocean it's like exactly there's I mean even as someone even as someone who who you know uses these products I mean that the amount of people that would be capable of using and fully understanding these products is extremely low even of the onchain people it's probably like Sub sub two% or something something I mean it's it's it's something it's something and yeah Cosmos has a bit of a distribution problem or aware yeah and I think that that

highlights it you know to varying degrees like of of how painful it is but yeah in general I think think that's fair yeah I mean Cosmos I I just I'm a huge fan of that ecosystem I know it feels a little disjointed right now but I think they're gonna either G to get it together what one thing I I I would be curious to get your your opinion on is you know while we're talking about you eth and ultrasound money and commodity like money you know how how do you view I know this is something that we've talked about off air before but how do you view the idea of issuance and whether or not it's a cost to the network and I'm going to put a little as around that term cost to the network but you know this is something that gets

debated back and forth quite a bit how should investors think about issuance is it different on the L1 level versus on the app level I mean how do you think about this idea of of issuance putting on your investor cap sure um you know I think of it as uh maybe this little bit of like a traditional sort of like um mental model but I think of you know it's just take like an L1 like ethereum um it's like a Marketplace Marketplace for for Block space right um it has a demand side of applications that want to consume that block space um and in order for that block space to be valuable it needs a supply side of operators that

you know basically sign off on the blocks and also ensure that you know the more distributed it is essentially the you know more secure the the block space is right um so that's the product first of all and then from that that's how I kind of back into my thinking here um you know these your supply side are service providers they need to be paid in order to I guess maintain the your value prop right which is incredibly neutral like block space and so I view it as a cost um like I know this is this is like gets into a lot of there's another view where like if you're well you can be a Staker maybe that's like preferred stock um I think if you view

this like very very simply I mean there's like three different pnls there's a supply side p&l there's the Network's p&l and then there's applications pnls right um and for the network like the revenue is basically what people are paying to consume the block space um and there's a cost which is issuance um and then there's two pieces of like what I consider today to be like I don't know rev share or like uh basically supply side rev share which is like the execution fees and me but the network can always pull those back in right so thinking like meev burn right that is now improving the

marketplace's economics because it has enough leverage over its supply side to say hey I know we were giving you that part of the revenue before but like we're going to take that back um and the basically the p&l for the supply side right the supply side's Revenue is the Network's cost that's issuance Supply sides costs are their operating costs um right so that's how I say the app maybe the appside their revenue is fees paid by users to use the apps their cost is like what the pass through costs are to you know pay for the block space um and so you know like for every dollar that is spent on on Unis swap you know half of that is basically going to ethereum

and half of it's going to the lp like if you're just looking at what people are paying to interact with Unis swap um and that's a huge huge rake and so that's generally how I think about it I think you know once you get into the application layer like there it's there's you know you get there's some nuances but in general I just see this as okay if you took away issuance as a cost then would you be able to like maintain your value prop no right your supply side would go away um unless maybe you're earning so much revenue you know and you're fine passing through those costs and not having any any other sort of Revenue like mechanism right um

yeah so I'll stop there I know we've I've I've heard both sides of this many times but sorry I just I can't get past it I agree I agree with you I I think the this is supposed to be a debate Mike all right here's what I'll put well so the a person who originally pushed back on me on this and I didn't think he was right at the time actually got a little frustrated but then I sat back and thought I was like damn it he's right is John Chau and and I think he's parti there's a what does it mean to be a cost to the network right I think when you I like the way that you frame things in terms of intersecting pnls between different stakeholders that coordinate economic activity around the network but the Network's weirdly not a stakeholder

in the same way that again eth is a commodity let's say oil right when there's new oil wells discovered is it a cost to oil that that doesn't even make sense as a framing it's not a cost to oil but it does have an impact the additional supply of oil has an impact on the p&l for uh people who are pulling oil out of the ground so to speak so it's it's it's a semantic note but I think it is actually a very important semantic note in that yeah the network isn't really a stakeholder it's what really what you're talking about and the the simple you know bell curve thing here is like really what people are asking is is the price going to go down is there if there are more issuance is

the price going to go down but it probably is an important distinction to say it is a cost to Holders not necessarily a cost to the network um now the B the big difference here being with something like oil it's not you know technically there there is a group of people that can vote and change the issue it's not like there's that's where that's where the analogy breaks down a little bit you know there's no oil Foundation there is OPEC there is OPEC but it but uh there's there's no there's no way that you could actually there's no real ability to change the supply so but that that's where yeah I think it's fair I just see less less differentiation between you know like the network and eth the the

asset um you know I think the economics of the network directly impact the asset um and if more people you know are more and more people are using the demand like from the demand side is going up the block space is getting more and more valuable right that occurs value to to the holders right um and in the opposite degree if like you know way more issuance is going out than revenue is coming in that should in a rational Market decrease the price of ethereum not because of issuance right but because like it's being used less the economics are like like the actual p&l has has has gotten hurt right and this is not me saying that like also that you

should have deflationary tokens or that you should have hard Supply caps either um I think it's just it's a balance right and there is like you should be striving basically not to be overplaying overpaying your supply side um but you need to think about like the downside tradeoffs of let's say we've been talking about like minimum VI issuance there's been a lot of like talk about that recently and like you need to be careful not to try to draw that line at like the bare minimum you know issuance for the network to work because that has like Downstream implications about well maybe that's keeping a couple validators profitable that you're killing the entire longtail right which then hurts

like the value of the block space because it's no it's it's totally centralized yeah I think I'm still undecided about this but I think even like you use the word revenue for the network and I feel like that's a confusing term and even when people talk about something like blocks based profitability again think about the oil analogy really what that's saying when the ethereum block space is profitable is that there is demand it's it's an indication that there is more demand to use the block space than there is supply of the block space it's kind of like in oil you know you would not say like if there's more demand to buy and use the oil than there is supply of oil it it's

slightly different I get that it's slightly different just even like by by the flows of the value but you wouldn't you'd see that you wouldn't it would be very confusing to say like the the revenue of oil that just gets reflected in the price of oil in the same way in theory the more the more profitable the block space is the more demand there is for Block space you know relative to the supply in theory the accounting mechanism which is ether within that block space should go up in value in practice I think what makes it even more confusing is that the price of ether tends to lead block space I think block space you know profitability or demand demand characteristics of block space

actually lag the price just based on this this is how I think money flows into and how bull markets typically kick off which is that price leads everything when the price goes up people start asking why there is a positive narrative that gets attached to the price movement uh the the positive narrative in turn feeds more interest in buyers price continues to go up all that positive fly whe that we talked about before kicks in VC start getting involved again and and that's basically and that's it I'll just say this like did ethereum the asset become more attractive after EIP 1559 was like introduced and I would say like yes quite a lot yeah

the revenue is the basee fee today right that is like to that Revenue That Base fee it could have been gone to like some Dow that does public goods funding we didn't want it like that that was an option it's burned just for Simplicity sake right and in the future if ethereum stakeholders want to do so they can then include like the me portion of that and that's what's being proposed with like me burn um again I would say that this is a making the asset of ethereum more attractive assuming that you know demand continues to increase right um to me it's a little bit less I guess oily and more like we can make decisions that

make our product better or worse if oil can't make its product Better or Worse right but see that's such a great example of a decision around making it eliminating use right like one one thing that you could have done this is what Cosmos does to some extent is to say hey we're getting this Revenue we should invest it suddenly that looks very company like right like then you bucket this as like a company like thing but the ethereum decision to burn not not only the the base fee but now eventually potentially the execution layer me type rewards that just makes it look more like a commodity because it isn't this like Equity returns type thing the I and I I would say also I have a chart I

should showed on this podcast it was showed to me by yurian Fidelity boy uh Fidelity man I should say and he he he showed me the like 250 year returns of cash yield bearing cash Commodities gold equities yeah equi smokes everything yeah and commodities do all right uh actually yield bearing cash does extremely well um and gold and like Precious Metals has these sort of spikes like this um and I think if you look at eth or Bitcoin as this ultrasound money commodity like thing probably it's just funny Bitcoin has this hold it forever type thing you don't really want to hold a commodity forever that's more of a

trade right like you're making a trade based on this environment of debasement and people moving should be sort of a onetime thing but it should not be a forever hold and that is how I kind of view these L ones is like they're the price ceiling on Commodities is that you don't really want Commodities to be expensive because they're used for stuff right eventually not that social like markets can decide Commodities but like for instance when oil gets too expensive like OPEC finally is like all right yeah like you know we'll release a little bit more of this yeah and and you know that's if you if you calling something a commodity like money you're you're subjecting yourself to those Dynamics because yeah you don't actually want e to get too expensive because thenone

gets priced out yeah I've just never really subscribed that hard to the commodity side um I think of it more like okay would ethereum be more attractive as an asset today if it didn't if it had so much demand that the fees that like flow through to say like execution in me what if that if it was like significant enough that that could sustain their supply side with no issuance I would say that that is makes ethereum a more attractive asset right now you have like zero actual cost coming out of like the asset right um and the price of ethereum could go up a ton because of that right it's and

you're making lots of you're I think where it gets a little complicated and not perfect is that like you get a piece of that even more of that Revenue if you like decide to stake it just to get the pass through costs um but to me I think that you know I don't think there's going to be like any sort of you know we should release more ethereum because the price is getting too high and it's killing user experience I think that like you can eventually get that through different like scaling mechanisms um but maybe that is like the the upside cap in some degree is that as it gets so expensive you need to find even cheaper and cheaper and cheaper ways to like get the same thing and maybe now you know you're starting to use like more like Celestia

instead for da because I think that is I think that's exactly what it that's what we're talking about the the two ways of scaling ethereum basically in my opinion two ways of scaling ethereum one is to move some of the computation that was happening on eth offchain so that could be in the form of layer twos that could be in the form of proofs and co-processors or whatever but you're taking some of the computation that's happening very expensively on eth main chain and moving it somewhere else and posting a more minor you know part to ethereum and then there's the part of ethereum which like actually make like redesign parts of the execution layer to make it more efficient so that would be what monad is doing or the svm would be a good example of that and you know both I think both of those things like

they're the same they're the same Market forces acting on the same thing and they they will be uh whether it's this is this a classic Commodities thing what you just described like seeking Alternatives right like when one commodity gets to expensive seek Alternatives um so I think there's just this natural that now that said I think this is this is a good time period to own these things like this is the trade portion of the the layer one asset I would say yeah yeah right I think it does get interesting if like you consider your main value prop being like an app for platforms or a platform for apps and now like the success of your you know Bas layer token is degrading that ux um you know there could be like little periods of right like which we had before

a59 where it was like almost unusable right yeah yeah to like interact on ethereum and now okay we've come back down because we've had like ways to like maintain good user experience but still like you know get the benefits of ethereum and so we'll have Revenue go down for a bit until again like the amount of activity on that like L2 level you know gets the point where it's making ethereum's price go up a lot again and maybe like you know we'll see if people start using Alternatives um yeah so I think it's a long if you're playing the long game which is to maximize the amount of activity happening on ethereum you know I think there's like just I I think it's a lot of

interesting questions there that would maybe point to like not making decisions in the interest of this being a you know a money or a commodity um or maybe it is more like a commodity because you do want to keep it cheap yeah yeah there interesting this is something that gets talked about more in the Bitcoin space but if you go back in the history of money there are more debt-based Commodities more commodity based monies this is where I really do think I I would personally be in the camp of I don't View something like Bitcoin or ethereum is a company with a it does have a product but it's in the same way that like a raw material is a product it I I I do view it as something unique that more is more analogous to a a sort of digital commodity as opposed to the

product of a centralized company and I think yeah I've just that's how I view at least it's really ether Bitcoin I think salana Adam you know Soul adom are like on the on the verge of that as well um uh maybe last thing just it looks like this this was this looked like it was going to be pretty cool for a second now it looks like it I guess you were telling me it might not happen but the the stride acquisition by The Hub and I guess two well you're you're closer to it than me you want to just describe we talked about a little bit last show but you want to just describe what that was why it was potentially interesting and then we can get into some of the Dynamics of it yeah absolutely so for those who don't know stride is the uh

the leading liquid staking provider in the cosmos ecosystem um and I think roughly 70% of its tvl uh is is in staked atom St atom today um and I think you know they've basically made a couple strategic decisions um that has already like increased I would say like uh its alignment with with atom um and also like the security of the of the protocol so stride first became you know an uh a consumer chain of of atom so they're ICS chain which means they are now you know the atom validator set is is operating stride um but they've retained basically

the majority of their economics and their governance rights so before this proposal you know it was getting the security of adom but it did not have full alignment in to some degree um and it it only got the security of like the the I'd say like the operating security not the it didn't hadn't mitigated the governance risk piece and I think that you know if you can just if you're in this position in Cosmos and you look at see what's happening over in Lio and ethereum you can tell that you know at a certain point of of growth you know there becomes social scaling issues if you don't you know basically decentralize the uh the liquid staking

protocol as much as possible right that's what we're talking about the beginning of the show um and so strides you know kind of proposal is Bas on the fact that okay if we merge with the Hub which is the single most decentralized proof of stake I would say um a network that also has token you know governance um then we can basically avoid running into these issues when we get really big right so this would this would make uh first of all this would make you know all of the atom holders comfortable with stride you know having 70 or 80% of staked atom you know as as liquid staking tokens right if they owned and

controlled stride um this could even make other networks that are you know like like Celestia or or dydx more comfortable because okay the you know what was pointed to as a a governance risk is now you know a much larger set of stakeholders right it's much harder to attack or do like malicious things through the hubs governance uh given its market cap you know than it is through the stride Ence today and so the rationale going in was okay we can make like very simply the biggest best version of of stride if it is you know one and the same with the cosmos Hub um and from the hub's perspective we think

this would be attractive because you know the Hub has kind of been soul searching for um I would say you know source of of value ACR um you know the Hub unlike ethereum doesn't have you know a product like block space that everybody is using right uh The Hub is is is not like the L1 of of Cosmos it's it's really you know its original purpose which was to be an IBC routing Hub has not accured very much value at all um and any Revenue that they get from being a security provider is you know kind of contingent upon its market cap Staying High and its market cap is not going to stay high forever if it

continues to not really have any sources of revenue right so that was the rationale going in is that okay great The Hub now has like a revenue driver and a real like business associated with it um and stride can basically you know avoid these like social scaling issues that come once you get to be a certain size so that increases the ceiling of strides market cap and it now gives the Hub you know like something to basically really focus on and kind of like you know that starts to build out the vision of how it accre value in the long term um of course then you get to like the process of actually doing this through decentralized governance which is uh

typically very difficult um I think there are people on The Stride side that were concerned M only had two two big push backs uh I say like there's one push back there was like okay I think stride has a lot more upside than Adam um and that kind of ignores the fact that there'd be like even more upside if they would merge or maybe they disagree with that right and then there's I think a really valid concern to some degree is well do we actually have a worst shot at getting big new networks you know like a Celestia because we're like this Hub aligned um you know protocol rather than being a a neutral third party um with

the Hub security like isn't ICS enough and then so those are the two push backs on the stride side and then the push back on you know from the the atom side was I don't want to Mint any atom um there's only 30 million dollars of of adom left in the community pool and strides market cap I think before it dipped was was around 75 million and I think it's around like 50 million now um and so you know I think yes yes of course it is yeah yeah yeah it went it went it went from around

75 cents to around 50 cents um which is very interesting you know there's a lot of overlap between the two holders who knows really what's going on um you know there's a lot of like it it's always hard to tell like what is just kind of you know your your crypto Twitter noise versus like what are like the most you know the the the most important stakeholders think about all this um and you know there's like a lot of you know i' would say like uninformed takes around this is stride like trying to get an exit opportunity um and that makes no sense to me because first of all would have been impossible and second of all they they they're not looking to exit at like you know

whatever it is their current market cap right um this would only be done if everybody can agree that this is going to you know basically the the the sum of these two parts is you know larger than like what they would have been uh have had they stayed like independent so yeah it's it's been interesting I mean it's it's definitely different than like the ethereum enshrinement debate but you know there there are some there are some like definitely similarities um and this so it's not quite the same as like ethereum saying yeah we're going to acquire Lido um but it's not not impossible um like Lio could propose tomorrow that like you know they would

never do this but hey uh I think the biggest version of Lio is one that is actually owned by ethereum right and we create this like subow uh within like ethereum's you know outside of like ethereum social consensus and now you guys don't have to worry about the you know self-limiting debate anymore because you guys can control things and that's going to guarantee that get you know 80 90% market share uh and it will make you guys more comfortable that was kind of like the the the rationale here if you had to draw an analogy that's definitely imperfect I agree so there's sort of just like any m&a transaction there's sort of a strategic rationale for both standpoints from both the perspective of the stride community and

the atom community and then there's the the economic perspective from The Stride in the atom community so I think from from the The Stride perspective is kind of like just to quickly sum up it's like let's just avoid all that stuff in liol like we see how that's all playing out we understand that in order to hit the that we're in a market where there's a natural monopoly in order to get to the 80 or 90% we're gonna have to solve the social scaling yeah dilemma and this is a pretty good way of sidest stepping that you know and presumably capturing 80 to 90% market share will make us you know be very good in terms of the appreciation of our token right right simply said decentralization is a growth strategy like that is the which is what makes LST so unique in super super unique yeah I totally agree

um you know I think the difference is they are they surface they have more supported networks than any other LST out there I think they have like they support like eight or nine different chains right now and that's just you know the nature of Cosmos um and so it's it's a little bit different in that it's not like you don't know if that same I guess decentralization as a growth hack applies outside of atom which you'd be merging too right um and and then I guess from the atom perspective it's like yeah this is a this is a uh Revenue stream but I but I think even more than the revenue the incremental revenue and the control that it would bring in I think the sole

searching of like what is the road map for the Hub and how it's going to Value like this is a critical building block there so so one thing that I mean my my sort of read on this is um I I I mean just in terms of m&a I've always been a little bit bearish in term this this question crops up every couple of years when is crypto m&a someone makes a prediction crypto m&a is going to happen it's going to happen this year I've never been particularly excited about it because the valuations are really wonky and there aren't really that many businesses with real Moes in this space maybe that's part partly because it's a maybe that's partly because of the open source nature but when you really I think start to look at most businesses like maybe there like two or three people that I could maybe just hire away

here instead of paying 100 million and that's the other thing the valuations from Founders are just completely unrealistic and untethered for the most part so yeah but I would say on the moat piece I would say I would push back a little bit um all right there's two two Moes that I think so like I did hear people say like why don't we just Fork stride you know from The Hub side like why the hell would we be minting all this atom when it's all open source we can just Fork this thing um and I would argue that would not go well because I think there are there is a mo around first of all like Talent human Talent like there's a team that is really good at building products and like has been laser focused on execution and you know

actually like you know direct to retail products there's nobody on the Hub side that that like has any like remotely close to that right um and then there is another I would say like moat somewhat around brand um and a lot of there's a lot of layers to like brand but I think you know um that to me is where I would maybe make the distinction um and then on like the deal structuring side it's yeah it's interesting because you would be like okay let's go to like trafi let's pull in best practices um you know we should apply like a control premium we should be looking at this this and this and it's like well yeah the same time you don't want to pull in too many

of those like approaches because then you would have to justify why the market cap is the way it is today when the p&l suggests that that's like you know 100x 100x earnings or like something in you know like that would just never happen right so yeah I think it's still super messy when like the base valuations are not grounded in like a like the way that trafi would value it right um and then you're trying to slap on all these like you know traditional like best practices and you can get yourself in in hot water if you're like trying to justify a premium that way well I think so obviously trafi and especially the bigger the deal is the more laser focus

they are in multiples but I I've always been a fan of the framework of build versus buy when it comes to valuing businesses is outside of just the like how difficult would it be to to build this on my own versus what you've already built and when you when you decide to buy there's the there's the multiple price that you're paying but there's also the execution risk that maybe I just try to build what you guys build and I just can't just L can't do it or maybe there's a time to Market element of okay if it took if I maybe I could build this maybe I could even do it cheaper but it would take me two years and where would I be relative to the position of the market in on a two-year time frame and I think that's probably more applicable of a framework

to be looking at it uh yeah from this standpoint could couldn't agree more like and looking at it from an Roi standpoint across like all those different paths um right and you know the other the third option there is part right and I would argue that's where they are today they've already like partnered right they're already sharing economics I think 15% of strides Revenue goes to the hub um and in return stride gets like you know the operator set which makes them more secure uh and I think what was proposed is hey this is going really well like you know I think we could both benefit by you know doubling down and going from partnership to to to merger um or acquisition and yeah you know the market disagreed the

market disagreed or at least crypto Twitter voices disagreed and it sounds like you know it was allow enough basically to to to pull it back um but yeah I also do have this like you know the Perpetual m& is coming to crypto type of deal because we do see areas that like make sense for consolidation right um and you can like lay out a rational case but then when the you know rubber hits the road it's like oh nope still not there not even close so here's here's what would have and this I feel like I I'm coming off as if I'm criticizing a little bit the the cosmos and that's that's not what I mean to do here at all um but I think one thing that at least I am lacking and maybe it's because I'm not as in the

weeds but I feel like there I'm I'm not seeing the I think if you had a clearer vision of the Strategic vision for the Hub and where something like stride fit in it would be easier to get the community behind something like this if that makes sense if it was like so like for you know what for ethereum it's like okay we they vitalic you know the order of operations is you know vitalic writes something everyone scures about to essentially do said thing um but but it kind of works right okay rollup Centric mod road map rollups end up getting built now what's next on the road map we need to make da cheaper for road maps or for rollup so we got Proto dank charting eventually full dank charting then we

know that we got to get uh proposer Builder separation it's like there are these things that I know and so when you have the full strategic vision of where you're going it makes it easier to say okay this is a huge priority if I get this thing in then it's going to help me get to this thing in in the in the in the future whereas I think that's what's sort of missing here a little bit it's like okay this is a great source of Revenue but I I don't see like where's the full picture like are we gonna go acquire more things and and and when you don't have that suddenly it just becomes a well how much is it cost and how much am I immediately going to get out of it instead of wow I'm so bought into this future thing I'm so pumped about I

cannot wait to get there oh if we got this little piece here it would get us closer to that Vision okay Le let's just get it the cost is the cost you know what it's just a very different exactly it's if you have a road map you can see like make a decision based off of like is this going to accelerate the road map and like are the you know the benefits of that worth the cost like it's it's so much more simple and yeah I couldn't agree more um you know I think there's like a lot of challenges I would say the main ones are uh around first of all there's the cosmos stack road map and their core objectives and there's the cosmos hubs road map and like Vision

right and there's a challenge here where the people who are in charge of building I would say both right have to kind of choose which one to optimize for and then you know so okay we're g to go bring value back to Adam because we've been focused you know on the the cosmos stack for a while and Adam suffered okay great within Adam there's very little like I mean there is there's like no consensus around what that vision is um we we had adom 2.0 right that was like the at least yeah one attempt at it um you know it got it was it was shot down and now

it's kind of like you know again people are are trying to pick up the pieces and anytime something is put out there it gets you know a ton of push back from people that you know it's almost like people are afraid to get out of this sort of like like meme stage with with Adam where it it's it's still valuable but like the second you try to actually do something it becomes clear that like okay maybe we should put a value on what you're trying to do and maybe that down um that's challenging and same but I could not agree more like if there was a grand if there was at least you know not super prescriptive but like somewhat of a an aligned vision for the Hub like and this decision would be a lot easier and

more clear for both sides right um so this observation I was listening to essentially this discussion you and I are having with our our analyst uh on zerx research and effort effort Capital as you know as big in the Cosmos ecosystem and he made this observation about he's like yeah it's kind of funny that these communities don't feel aligned it's like oh stride holders atom holders it's the same people it's the same people you know the vent diagram of Cosmos is basically a circle it's it's it's almost one to one so it's just kind of funny that that you'd say they they aren't aligned and you and I have talked about this a little while ago we watched I I do think this is the benefit of ethereum in the beginning it had everyone just got behind this eth and

they rallied behind it it was also it was a shelling point but it was also a source of shared wealth in the same way the equity in a company unites everyone and when I remember when we saw the rollups leaning in and each one each rollup had their token it was like well eventually you know it's not all one thing anymore you know they're gonna be distinct communities and I think you are starting to see those cracks form in in ethereum today but Cosmos started out with that so there was adom but the atom never accured any value because it didn't acrew any other value and because there were all these other tokens there was never one thing for people to Rally around and it's just it has led to more disjointed action I think and I well I mean that's that's like that's part of

the the the you know Vision right um I think there could have been one version of Cosmos where like you know the the vision was to optimize for like Cosmo stack adoption um and and you know basically treat the Hub as like a a public good of some kind and treat you know atom as a public good but that's very challenging because you know you did raise this Ico and so like you do have to return Capital like to the atom holders at some point but I think more so than any ecosystem the tension of like value acral to that original token you know is is most at odds with like the vision of Cosmos you know uh of like the applications broadly because the

more value that goes back to like the atom Hub is presumably being taken away from like the app chains themselves and the whole reason you're building in Cosmos in the first place is because you want your own app chain um so yeah I think it's it's it's difficult it's more difficult to rally the troops per se like in Cosmos than any other um any other ecosystem because they're building there in the first place because they wanted more sovereignty than than ethereum they didn't like being like you know subject to kind of like the road mapap laid out by falan maybe you know um yeah it's kind of in their nature right I get it and I think that will be

I think that will be beneficial down the road I think again we've talked about this a lot but I do think the sequencing generally is going to be launch probably actually skip main chain these days probably just launch an app on a rollup maybe then you decide you want to be your own op stack chain then you probably migrate to Cosmos but I do think in the meantime I don't know I don't know if there's some yeah I mean this is kind of the trade-off right like the full sovereignty but you lack the unity and maybe there's an maybe there's a an analogy to be made here to the United States itself with the original Articles of Confederation and it's like yeah everyone wanted no central government and there was like well we need something you know we we need maybe

something a little stronger than this and maybe one one fix here would be just I don't know if you could even do this at this point I I think the community would probably hate it Cosmos people maybe maybe you just absolutely hate the suggestion but why not make the default gas on every Cosmos chain Adam just to start right like that I feel like that's not even a huge ux sacrifice because I think people want to use Adam anyway I really think they do and I I don't actually think people want to use usdc like I I just challenge people who say that BEC I and I used to be on that train but I'm not sure it's so obvious anymore like think about the user flow for most people into the space right you start on a centralized exchange like

coinbase then you buy like a little bit of Bitcoin maybe some eth okay then you take your eth on chain then you start doing things with it it it you don't like go onto an an exchange swap your USD for usdc take that usdc on chain and then start doing things with your usdc you start with the thing that you bought on the centralized exchange and so I don't actually think it's a bad user experience to require the native token for gas uh I don't think you need to require the native token for gas I don't think it needs to be atam though um I guess so there's one question like can Cosmos succeed without you know Adam succeeding

um it's an interesting question I think it's it's still TBD but I would say I would point to one thing like the biggest win Cosmos is had is dydx adopting its deck right no every body was Cheerleading when that happened and and frankly Cosmos mind share went up a lot after that happened that's when this whole app chain thesis really started kicking into gear do you think dydx has any interest in making like oh this isn't gonna work unless we have like Adam as our as our gas token like I get it no right and so there's you know for the cosmos stack to win right that in

some ways means like value doesn't you can't force value acrel to to ad them that said I think everybody does realize like damn it would be really nice to be like rallied around one token right now and like we can see that that's you know a big part of ethereum's success um but I think you're you know like making tradeoffs that end up undermining like the reason that you know like people want to build on Cosmos in the first place that's the risk yeah I I agree I I hear you on that I'm not I'm not really I'm not really pushing back at all I I don't know it's an interesting question

I the immediate answer that came to my mind not having really thought about it is yes Adam could survive or Cosmos could survive rather but you know maybe it doesn't look like Sam Hart we'll say Cosmos is a design philosophy and that for the design Philosophy for um you know like IBC or you know tender is in that consensus to survive no you don't need Adam to succeed but to succeed in the way that I think most people implicitly mean for it to succeed as an ecosystem I do think you need Adam I need I you need let's think about it this way like does OP need to like ACR

tons of value right for like the op stack to be successful um I think again the only way to do that is like through something like the law of chains right um but how do you justify the law of chains you have to make like law of chains op stack rollups first class right they have to have like there has to be like user end user benefits that outweigh that cost right um and they're doing that well they have their own Road mapap and that's like kind of reminds me a lot of really where like the AE was trying to go but the difference is you know the a doesn't have like differentiating features like

uh that mitigate pain points that are as Extreme as we see on you know Ro isolated rollups today um but I think we will see some interesting Dynamics there right where like you know if you want to use this stack um do you have do you need to pay a tax right um or like can you bet on yourself right you can bet on your your own appp as the Shilling Point um and so it will be interesting I I I don't know how but I just can see similar themes starting to play out with these with these rollup Frameworks too where like they're stuck in between you know optimizing for like you know op

valal and then op stack adoption like there's a little there's always those always going to be attention there um in the same way that you know optimizing for aez and atom value AC is a little bit at odds with Cosmo stack adoption because to my point earlier like if you had to use atom as the gas token I think DX would have said like that you know um and so it's it's you know it's just kind of a I'm not sure I don't know I don't know that to be the case and again I think there's a I think there's a business I think Antonio is a really pragmatic founder is my read on him and again the way I would think about it is

I want to do what my users want to do and what the choice that eth has made is I think there is a better I think the business decision for someone building on on E I mean it's mandated on eth right but like even like the friend Tech example right like you view your your target markeet as people that want to spend their eth and that's actually a user experience sort of like it's a way to carve out or Target a very engaged user base as opposed to an additional friction which is how I feel like this is traditionally viewed you know if you make someone use your token as gas it's a friction whereas you could look at it as hey here's this huge base of people who are like weirdly religious about this thing and like want to see it used

and you know like there all these people just love to tweet like oh I'm using my eth for this like silly little thing um and I think there is I think you could make a pretty compelling business business case like I've heard Antonio say this before that you should think less about these ecosystems as distribution but I don't know about that I think he's right about that well okay maybe maybe this is a little bit unique because users that he's trying to bring with him did not pay for gas period in in dydx V3 right it's gasless trading right yeah and in dydx V4 they're not going to be paying in dydx for gas fees for trading it's still gasless trading

so I would just say that and all the collateral is based in usdc it's not like you know so again like I think it just I think Cosmos draws that type of of developer right um that cares about all those things and doesn't you know maybe necessarily value like and I also would maybe say like yes I agree with that Adam's in a bit of a tougher place to like really really enforce that or like I just I just think the friend Tech eth you know example like is a Little Bit Stronger like a point because you know people own eth like it's very I wouldn't even say like the majority of crypto does not own you know atom um but

I do see your points like like and I I think they're stronger on eth and they're stronger like the more of like further along you are in in growing those Network effects of like you know the base asset um yeah so always a mix of both you have to do both it's its product and its distribution you can't yeah you can't totally pick one or totally pick the other you got to do a little bit of both but look it this did end up being a little bit of a DAT and by the way I I really do love Cosmos and the reason I I enjoy having these sorts of discussions is like yeah I have just a a vested interest in in seeing all these ecosystems succeed me too the good ones the good ones the good ones the good ones yeah yeah well we did see uh I

guess just the one little newsy thing that was kind of interesting we did see Paul T Jones say he likes the gold and the bit corn this week he likes it again he likes it he likes it again baby let's go back all right so back so back no it is October it is it is not October it is October so oh boy all right buddy this was a really fun one we should make these debates this should be a nice little nice little feature yeah little yeah know I think so every once in a while once once once these narratives get a little spicy we'll get on here hash it out um like I like it yeah all [Music] right