The Multichain Endgame: Modularity, Network Effects, and The Intent Paradigm | Hart Lambur

Transcript

on the Goldman trading floor when middle financial crisis and our swaps desk one of the best swaps desks in the world having like zero idea what their risk is like within the nearest hundred million dollar Mark right um and the lack of transparency caused by uh a legally enforced uh Financial system where in crisis mode legal enforcement the ability to rely on that basically goes to zero like it's IT addresses like two of your points Point around the problems with the financial system that is based on legal enforcement and the lack of transparency because of that so we'll save that for later in the season what's up everyone we are now almost 1 month out from D London the largest

institutional conference in all of crypto that's happening March 18th through the 20th obviously in London this one's going to be a blast we are almost 10 times over subscribed for tickets which is pretty nuts so again we've had to lower the discount to Bell 10 and better yet make sure you bring your friends we sell a four pack pack of tickets find people in your company bring your boss bring your family bring your girlfriend or boyfriend whatever it is just go you're going to get a discount if you use that team pack run don't walk make sure you go get those tickets today and cheers and see you in Sunny London Town 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 episode of bell curve this is a very special episode of belr because this is a kickoff episode for season s the multi- chame endgame and uh I'm introducing my co-host for the season Hart lamber Hart welcome to the show man thanks Mike um honestly ly honored you um made this offer to me I'm really stoked I think we're going to learn a ton and uh I really do think uh the timing of figuring out like what this

whole multi-chain world is going to look like couldn't be better uh I feel like it is of the moment for sure yeah I'm pumped as well man there's no one that I'd rather be doing this with and for new listeners to bell curve um this is just to give you like an over overview of what we're going to be doing here B curve is a deep dive on one particular topic it's going to be Nine episodes in a season format so there's going to be a kickoff which is one you're going to hear today hard and I are going to walk you through the big themes and sort of meta questions that we're going to be asking this season there are going to be seven interviews throughout the course of the season and then we're going to conclude with a wrap up as well and just to maybe I'll sort

of kick us off for the why like why we're doing this now and then I'd love to get get your response to this heart but reason we're tackling a pretty broad topic here the multi-chain endgame is I think we're at a unique Moment In Time time where some of the Dynamics that we had taken for granted in crypto are changing so you know I think a lot of folks in this space I know not everyone would agree with this have accepted the idea that they're we're going to be living in a world of multiple chains but I think just how many chains there actually are going to be is a question that not a lot of people would agree on how those chains are going to interconnect I think is a question that many people don't agree on and then I think we are going through a pretty

unique moment in time of unbundling and I think a lot of people call this modularity but the basic building blocks of what make up a blockchain just almost on a blocking and tackling uh sort of date like settlement data availability execution those are starting to get unbundled but even on a more meta level we're starting to unbundle protocols from their assets from their security models and it's just raising it's a it's raising a lot of questions and I think it's going to make people have to question some foundational assumptions U that they've helped for a long time in some cases so that's why to me this is such an interesting uh that's why I think it's so I'm so excited to do the season it's kind of a a much needed update to at least my own personal mental model for where crypto is headed

but what what do you think yeah no like I fully agree I'd add even like there's even some technical considerations here like how in this multi-chain world will apps be built like this goes a little bit to I'll call it like Market structure and um so like are apps going to be built on one chain their own chain are they going to be built with different components on different chains how will that work what types of applications will pick one like programming Paradigm versus another um the other angle I'd add from this unbundling perspective is like on the community kind of like social layer our community is going to get like unbundled from their protocol right that that's a

wild concept to think through that I think you'd probably have much deeper um thoughts on and yeah man it's like I think I'm going to sit through the season making a bunch of parallels to uh the history of finance and like Financial Technologies um and in finance sort of one mental model we might work with is we've had a financial infrastructure that has developed a certain Market structure right um so in equities markets which is probably what the audience understands best in equities markets we have high high frequency trading firms and we have Robin Hood doing like payment for order flow so then it's cheap and then it gets routed to these hft firms and a certain

set of exchanges it has its own structure but also in finance there's like how the FX Market works with a completely different Market structure and there's how like the bond market works with yet again a different Market structure and for me you're kind of like as all these systems got more evolved uh you saw where worlds or different ways where they got connected um but the market structures the ways they operate are quite different and in a sense I think we're gonna there's some parallels here to how blockchain systems are going to get connected what their Market structures are going to look like how they're going to operate and yeah man I think we got some amazing guests that

are going to help us understand that better I completely agree and I I love that we've got you here as well because I I what I should have led with here actually Hart if uh you know you were starting to allude to this a little bit but can you just give a couple of seconds on your background actually as a you know many people probably know you today as a a crypto founder and someone who's very technically oriented but you actually got your start cutting your teeth in in the world of bonds and bond trading which just makes for such a unique perspective can you just say a couple of words about you know how you wound up here yeah um sure man um okay so I did study computer science and was like nerdy that way um there's a whole funny story about like when I graduated there was like no

Tech scene in New York at all um this is like just so funny given what's happening today I feel like it's totally flipping it it it's it's a wild thought honestly and it it shows just what can happen in like a decade but there was no Tech scene in 2005 I'm Canadian needed a Visa so I was really gonna have to work at a big bank if I wanted to stay in New York um and then I'm like well if I'm working at a big bank I might as well try like the front office thing um and so I got a job as a US Government Bond Trader uh working with a bunch of other Canadians which is quite funny uh and I ended up trading government bonds which is a very old school Finance job it's like one of the

older markets um uh on Wall Street um and we had a very like kind of techy way like um Arbitrage Focus way of how we would um provide liquidity in markets but it is going to be quite interesting honestly when we talk about later in the season like intense um and some of the ways interrupt works because a lot of these systems look very much like my first job uh with bond trading like RFQ systems and the way orderflow auctions work um these are like the the more uh protocolized versions of what we what we did on Wall Street anyways I did that for a while um started a fintech business um that grew up alongside Robin

Hood which also kind of gives me the perspective of how Robin Hood shook up the market with payment forlow and off rank trading for free um and then I've been in crypto uh full-time since end of 2017 2018 yeah that's it's gonna make for I think a really interesting contrast for the season because obviously crypto is bleeding edge Tech and a lot of the Dynamics that exist in crypto are sort of perfectly inverse or flipped from you know traditional web 2 or tradire whatever but there's a lot of there's a lot of similarities as well and I think there's good reason to believe that some of the Dynamics that have played out and more established markets will play out in crypto also and one of the things that we're going to talk about this

season as well is the sort of currency element to this because I think you're you're this is most apparent in ethereum where I think there's a little bit of a Divergence in the road map today and maybe two separate camps forming of I don't I don't want to be overly you know prescriptive there but I think there are some folks who want ethereum the to compete a little bit more and some folks were much more interested in ethereum the Network's export which is its asset as a currency and you know the vend diagram of people that understand deeply uh you know the history of monetary systems and money and the people that understand you know intricately the architecture of blockchains is so low I mean it's such a small like it's this wide as a as a vend

diagram but I think there are lots of lessons that you know we could learn if there was if there was more domain overlap there but why don't we just start Hart from kind of the most basic perspective and maybe as a narrative Arc for this particular episode we're going to start with some questions that seem obvious and then try to confuse you as we go further into the episode then hopefully answer a couple of questions as we move to the end but art what do you think well let's just yeah let's go I'm already confused we're confused Mike we're confused together right so our yeah our goal is to unconfuse ourselves over nine episod this is the blind leading the blind yeah this is the blind lead we should have bled for that caveat um yeah but I I want to I want to introduce the First theme of the Season

actually is interoperability and maybe we could phrase this meta question as if we believe that there's going to be a world of many different chains how are these chains going to be connected so har maybe maybe to start with can you give listeners like your understanding you know if I could ask you to pontificate for a little bit here like what this world of multip chains is going to look like are we kind of in this more salana world where there're going to be a couple big general purpose chains or are we going to this million chain rollup world or give like kind of sketch um a sort of vision for the audience and then we'll get into what some of the bridging apparatus and kind of like the the different models by which chains get connected to each other today yeah man I love this all right

let's go um so Mike you and I have talked about this a little bit but um I do think you can zoom out and look at three camps of like blockchain ecosystems right now and if I'm missing anybody I apologize right don't hate me on Twitter right but the three camps I'm GNA label as salana and like monolithic blockchains right um uh ethereum and uh layer 2os and uh that type of layer 2 scalability and like Cosmos and I'll call it like the achain thesis here um and I love love love love that these three different ecosystems exist and coexist because I actually think they're

all learning from each other and they're all inspiring each other um and I guess if we're supposed to like State allegiances uh on this podcast uh before we get started like I come from an ethereum background mainly um I like a lot of the EOS of ethereum um but I I have a lot of respect from both of these other ecosystems um uh and I think that that I'm not in that sense a maximalist anyway um and uh yeah so like the app chain thesis which I think Cosmos has been teaching us a lot about um is very much bleeding into how people think about uh rollups and l2s and if you're gonna have a rollup per application in the L2 space um and then I think a lot

of the like on the salana on the monolithic side I think a lot of concepts of composability and the advantages of compos composability um and like some of the tradeoffs you may make in order to achieve better composability um they're really pushing the envelope there too um yeah what how do you respond to that yeah I would agree I would agree with those three those three sorts of ecosystems I guess from my own personal background I would put myself in the neutral Camp of my My Philosophy on crypto for a long time has been I actually would view it as a negative if any one of these ecosystems ended up being the the the way way dominant and the the way that I would describe this is I love the United

States of America I grew up in the US I was one of those people who my parents told me the US is the greatest country in the world they didn't even provide the idea there might be an alternative perspective to that but I also wouldn't want the US to be the only country in the world I think you know you know spice of life competition all that stuff is really good so I love the idea that there are many camps out there many different experiments being run so that that's the perspective that I come from I think there are but I would agree with you on that and I think there's a a little bit of a pushpull here when I think about how many different chains there are going to be I think people come at this uh from a couple of different standpoints there's kind of

the and I think crypto tends to go in like waves of overreaction so we went from kind of this like Bitcoin and eth era where like you know these chains are going to swallow the world and it's only going to be these one chain anyone that says anything else you know was not necessarily correct and then you know we had this overreaction to that where I think the multiple the sort of multi-chain thesis originated in Cosmos it spread over to ethereum and then we quickly swung to no it's going to be multi-chain and there are going to be a million rollups and then we started to to question that thesis a little bit because of some actual technical challenges that arose right and namely interop fragmentation of liquidity just made things really really tough and then

we sort of over swung and recorrect to this idea of salana where everything is going to be on one chain and I actually think if you squint at even the different architectures that exist they're starting to try to solve a lot of the same problems already like you could do a spectrum here I think it is on this the spectrum of cost to sovereignty of maybe like you have a full stack app chain over here then maybe you have a Sovereign rollup over here right which is you still control settlement and execution but maybe there's some kind of common da and uh consensus layer that you Outsource things to then maybe there's this like

op stack law of chains which is you Outsource Your settlement and you're not a fully autonomous chain you kind of subscribe to this Collective right this like bundling package that optimism is trying to put together then maybe you're your own rollup you know uh chain devoid of all of that anyway there's this like whole spectrum of different things that you can be and even salana like if you zoom in on the architecture of salana you have multiple different accounts and those accounts are starting to now fight for more sovereignty over the way that uh rent uh salana extracts rent and charges for computational resources so I actually think there's like a lot of similarity across even all these designs that look very disparate um at the same time and one of the things that I

frankly find myself oscillating between quite a bit and I don't think I have a clear prediction going into this season is just exactly how many chains there are going to be if I had to put my stake in the ground though I would say it's ultimately going to come down to sovereignty and the abil like the desire for chains to extract the economic value that they create I I think that will ultimately be the most important the single most important design principle um for what the the the multi chain is going to end up looking like I probably fall on the spectrum that I think Cosmos got it basically right with their end game um I think

Cosmos is constantly ahead of its time and I I would say that we're heading to a world of many different chains although I'm more blurry on whether or not those are going to be how those chains are going to connect and interact yeah okay so first off M I like I do like this like trade-off between um sovereignty what we two access sovereignty and um cost cost sure I I like that a lot um I guess it's like to zoom out and then go back in for a second to zoom out for a sec for a second there's a lot of analogies made to like early days of the internet right um and maybe we could I can make an analogy where picking your blockchain is

like am I building with sun Micro Systems computers or Linux computers or like Windows servers right um and there are big differences here uh and like the database you choose to connect them and databases of blockchains Look A Lot subar in a lot of ways there are big differences here and it's very possible that your uh your web like web 1.0 startup would succeed or fail based off of the infrastructure you built it off of but the thing that actually matters most is like did you build a [ __ ] application users cared about right like users don't care what computers your thing runs on um and so I do want to zoom out and make it really clear that like we are going to be spending the

season talking about the r architecture here but the the real endgame still is can users just use the application does it work for them um and like that that is going to be the multi-chain end game it just works um and we're going deeper on how it just works and so yeah to to bring it back to interop um we have these different blockchain designs and we now have um really cheap block space um the other analogy that I think is kind of fun to compare to um the the first Doon bubble um people were all this hype cycle around the internet was

so big people were lay laying fiber everywhere there was all this fiber that got laid that nobody used for a decade um but that dark fiber got turned on 10 years later um it was like a complete overinvestment at the time dark dark fiber got turned on 10 years later and was literally what allowed like YouTube to exist right and like Facebook stuff like that um and so I very much think we have we hit this this uh this this sort of innovation cycle where blockchains were concept got proven as kind of being cool useful in a certain way but expensive to use all the VC money and all the research energy poured into how do we

scale blockchains turns out we came up with some really great Solutions and they actually seemingly work pretty well um now we have really cheap block space um which is great and we probably have way more block space than we need uh but now the problem is how do we connect that how do we make useful applications that go between these things and I very much think we're going to have many chains it's going to be world of multiple chains but I think the real uh the real question mark is how do we connect that block space in a way that makes it um transparent to the user that it just like quote unquote just works for the user I agree with that and maybe

so agree with everything that you just said and maybe to refine just I'm getting on the books of prediction which could be falsifiable proven wrong is I think we're heading for a world of of many chains but I think the lines and distinctions in between what we think of a separate ch chains today will ultimately start to blur and become more meaningless over time so if I had to say a prediction in 10 years this won't even be a question because the perception of everyone interacting in crypto is that it's all one chain actually so let let's talk today though about how those different chains get connected so basically I would love Hart if you could give us an overview of the different types of bridges that exist today I think when most users think about

bridges they'll think about uh you kind of like a classic thirdparty mint and Lock Bridge like um like Wormhole or layer zero and I I would love if you could give us kind of like the the broader spectrum of of design space of different bridges that exist like many people like obviously a cross um has a very different design but many people would you know you you I think it also is relevant to talk about things like IBC right which is a very it's a type of bridge right and then there's even like canonical Bridges from uh eth main net up to optimism or arbitrum or something like that so can you kind of just for for folks who don't understand like paint the design space of bridges for us yeah totally I guess

uh Mike two things like first of all we should tell the audience that I do run a bridging protocol or an interop protocol called across um across is like an intent based Bridge which we're going to talk about over the season what that means um and you know what I what I actually want to tell everybody is that yeah I do have some biases because I've been working on this across protocol but um I try to approach stuff pretty open-mindedly here so my goal here is to really figure out on this episode like what interop looks like with you and uh uh I think well would am I your perspective but I'm not going to be I'm not gonna be Shilling across here let's uh let's be clear about that um agreed agreed but I still trust your opinion you know I trust your opinion so and and

I think um like even I mean bridging is one of those things and bridging in a sense all right let me get your your take on on this perspective bridging is kind of in some senses a myth in the way that we've historically thought about it in that when you like if you're talking about bridging your ethereum from like eth main chain even up to a rollup or something like that the eth isn't leaving the chain there's just some sort of vehicle that transports a synthetic representation a debt obligation up onto another protocol and then there's a spectrum of vehicles that are more or less credible or secure in their design would you

would you agree with that idea yeah um Mike like bridging here is so nuanced depending on what you're talking about and so oh man it it really can uh make your head hurt so look let me let me start going into the design space but pull me out like if I'm going too deep on anything here um go deep and and some of these yeah yeah okay so so let's start with the idea of um first of all blockchains like uh are State machines they keep track of current state um and independently and they only know what exists on that blockchain they need something else to tell them if something um exists on a different blockchain um

and actually typically that's called like the Oracle problem like how can a blockchain see something that's not you know um uh just internal to that own blockchain is you need a quote unquote Oracle to see a different chain um and frankly the way I even got involved in the cross is my other project Yuma like is focused in um generally the Oracle space and uh this is like why we have saw similarities here so okay fine so first thing to realize is like bridging GE isn't easy or obvious blockchains are built to only know what happens on the blockchain they're not built to know what happens on other blockchains it requires significant work or significant things to do that and you could kind of

also say this there there's an argument that this actually seems like you're a really hard problem because it's almost like you're building a meta blockchain to connect all the other blockchains so they all have like coherent State um and I I I think it's sometimes it's lost that like bridging it's like it's like trying to build the perfect blockchain there's trade-offs here right um okay so put that aside then I'd say uh at least conceptually you can think of bridging as doing one of two things you bridge messages so I'm sending messages between chains or you're bridging value I'm sending like value like tokens between chains um and this is also a

false distinction because there's weird overlap in certain ways that we can talk about but I think it's a useful mental model to say like am I doing a or b give us an example heart because I think people have a pretty good mental model for bridging value um and we actually on our on our last episode with Dan Robinson um talked about the similarities between a de and a bridge or an exchange and a bridge in many instances but give us an example because I think a lot of people have heard of this idea of like General message passing and sort of understood at a high level what it is but you you get a little bit more specific about what a message is and maybe walk us through one or two examples um yes so okay so one way that I could send a message or not send value

um like a actually pretty obvious way is uh governance parameters I'm just G to make a super concrete example so the Unis swap Dow votes for a set of parameters on ethereum mainnet where the uni token primarily is and they want to pass those governance parameters to a different chain let's call it link BNB right um you're not going to bridge value there like because and it's also interesting to think about that how much how much is that message quote unquote Worth right like if those governance parameters could change the unisoft deployment on BNB and they couldn't do this this isn't true I'm making a hypothetical example right but if you did design a protocol where you could

pass parameters that could change the protocol on BNB such that you could drain the protocol well that message is worth a lot right so you have this sort of arbitrary value to this message but that's an example of where you're bridging a message and not bridging value um the other examples here are related to a lot of them are related to when you are actually bridging value so if I have uh what I'm going to call like um a lock and mint style bridge I could have a smart contract on my source chain let's call it ethereum again in this example where I'm going to have I'm going to lock assets on that Source

chain like let's call it need of ethereum and I'm going to send a message from that Source chain to my destination chain let's make it be a layer two roll up uh where I'm going to then mint uh a representation of the source gen ethereum on that rollup right um that's another way where you are actually passing a message but that message is being used to pass value got it what what's also even helpful for for me to understand and listeners of past bellur seasons will know that we use this analogy a lot but if you think about the balance sheet of the bridge you know you could think about the liability side of

the balance sheet being like in this example the ethereum that's sort of locked up right in a smart contract on ethereum in most instances um and then you could think about the asset being this sort of synthetic you know message you know representation of ethereum that exists on another chain Bas that that's another sort of mental model to to think about the balance sheet construction purchase totally but I I agree and let's now think about it from the perspective of like a new rollup right um or any new chain if you're in new chain um you really do need a way for Value to get to your chain and you often need a way for um messages to get to your chain too um

so um uh most every new chain has some sort of shouldn't many new chains have a what I'll call a canonical bridge that is the default chain mechanism to potentially do this lock and mint style um value transfer and potentially do arbitrary messaging too um so it's interesting to Think Through the fact that like Bas and again there are exceptions to this so I I want to be clear but if we make it like every um optimism super chain or arbitrum orbit chain all of these chains come with a

canonical quote unquote canonical way of bridging value to that rollup and passing messages um uh but this bridge is designed to be super secure for the most part um because it it's supposed to be the canonical thing the the thing you're optimizing for first and foremost is security um and so in those designs you can Bridge value and you can Bridge tokens um using the canonical Bridge It's relatively expensive to do that um and it it takes some time not too much time to go from ethereum to the rollup but then in order to fulfill all of the optimistic type uh guarantees it takes

like seven days to go the other direction to come off the rollup onto mainnet um so like a nuanced example of how most chains there are exceptions have a in a sense a canonical uh lock and mint bridge and arbitrary message Bridge um yeah Mike I don't know I can keep going different directions to go here no this is I that's a that's very helpful and I think for for listeners who are sort of wondering right there are in the instance of like let's say a canonical Bridge which is let's say the you accept the least amount of trust assumptions but there are these meaningful trade-offs that make in terms of ux either the cost or the 7-Day weight period in the example of something like

optimism right um so I think you know Hart how do you start to answer the question that obviously we're we're moving towards a world where there are going to be many disparate chains and that could be you know the separations exist maybe broadly across large ecosystems right so there's kind of there's ethereum Cosmos and Salon ecosystems and there's like marginally better in some cases much better in in between those ecosystems right so salana you almost have Atomic composability within uh within the world of Cosmos you have IBC which is very good interoperability as well U and then in ethereum that's probably where you have the most fragmentation of interupt because you've got obviously great

Atomic composability on main chain but as soon as you move up into the rollups each one within their different bundle of rollups is trying to solve for interop and they are at varying degrees but will definitely solve that but then there's the question of interoperability between rollups which seems like a thorny thing so and then even you can you could think about big ecosystems sort of trying to connect between like ethereum to Cosmos sorts of interupt so you know when you think about the method um that these very disperate like The Wider Gulfs of uh distinction exist you know how are these how are these uh how do you see the the connections and interrupt working

yeah um I mean Mike we're going to spend a season talking about this or and elements of it but yeah man and the big question and I kind of think there's two directions to go um One Direction is you try to send messages and or send value between these chains uh in a faster and more secure way you just keep like iterating on like let's make it faster let's well keeping it secure um and cheap so we're going to go cheaper faster and not let things get less secure um and so we're just going to have better connections between things um I think the other angle is you actually uh do something different and

this is where I think the intent-based idea becomes really interesting um and the key observation here is that for most of what you're doing on blockchains there is uh a defined value Associated to it um which is very different from how like web 2 works right like web 2 you don't know the value of like the value of like the the Instagram message you're sending I I don't know right um but in web 3 you actually have like okay I'm trying to buy this much Dogecoin like I know how much that's worth um or I'm trying to buy this nft for this much money I know

how much that's worth and this is where you know I do come from a bit of a finance background but there's this other intent-based idea where I could actually have somebody um do that action for me like they literally uh could could do the thing for me on my behalf spend their own money um doing that uh and just es my funds are escrowed until I I quote unquote verify that they fulfilled their intent and the path here is is that this other alternative when I can kind of put a dollar value on some of these interop messages is we could have this thirdparty network of Searchers solvers Rel layers fillers there's different

names for them but go and be filling users quickly um very fast um and doing composable type things uh because they're fronting their own money and then we're actually able to use the slower pipes um the slower connections between chains to verify that cely um and so I I think one of the things that we'll get more clarity on over the season is like how do these two things interact like this intent-based framework where interoperability or at least many forms of interoperability and composability um are are happening because we have third-party people filling with their

own balance sheet um so doing the action with their own balance sheet and then using slower pipes to to verify it or are we going to go down the path of just making the pipes be faster and cheaper um or are we doing both right yeah I think that's that's a really great um sort of question to pose that we're going to be exploring for the rest of the season and a really good transition into the sort of second big theme of the Season which is this Paradigm of intense and this was a buzz word I feel like even a couple months ago um and I I I would love heart if you could Define for listeners you know you were starting to kind of get into it a little bit with

the design of bridges like across but you know it's relevant for even orderflow auctions and Dex design and can you just give us an overview you know what when we we're talking about intents what are intents and then we can get into some of the implications of like what does it mean to design an intent Centric broader topology or an incent intent Centric app or something like that yeah totally um and yeah I I I was getting into this but okay what are intents um I mean it literally is the word it's like what is my intent to do something here um and I I think you really need to Define it in contast in contrast to what a transaction on like ethereum today is so a a transaction is

like here is the exact execution I want to do um and and intent is here's the outcome I want this is what I'm intending to do um and it's more abstract and lots more wiggle room um potentially infinite wiggle room and how you get there you just want the output yeah it's just as a handy little like euristic the way someone described it is you're hard coding the output as opposed to hard coding the input basically if you one sentence and I think there's two interesting ways to so let's talk about just doing a DEX trade right well actually I'm sorry I'm I miss spoke already was just saying I have ethereum

and I'm trying to buy uh Dogecoin right yeah um two ways of doing this the the transaction way is take my ethereum go to take take half like I use like the one-inch routing algorithm or something I say okay half is gonna go to ins swap a quarter is gonna go to uh whatever some other exchange but here here's how I exactly want you to execute these uh transactions on chain and at the end of this execution I'm going to have this much Dogecoin right um the intent version of doing this is saying hey uh Hey everybody who can fill me I want to get the most Dogecoin um and maybe it's a limit order it has to be at least this

much but I have my one ethereum here I want to get the most Dogecoin Dogecoin possible uh you guys go figure it out right and the market participants go and figure out how much they could possibly fill this user for um so from my finance background like the intent-based structure here makes total sense um it's a request for quote right it's a uh an there's an order that comes in and we're running an auction of some sort uh to see which Market maker will fill the user at the best price and that's it and you don't care how the market maker

actually fills the user it's like they could be selling off of their own balance sheet they could be going short they could be buying from exchange X or exchange y or whatever else doesn't matter it's their thing to figure out what's up everyone we are now almost one month out from Das London the largest institutional conference in all of crypto that's happening March 18th through the 20th obviously in London this one's going to be a blast we are almost 10 times over subscribed for tickets which is pretty nuts so again we've had to lower the discount to belt B 10 still hooking you guys up get you a 10% discount on Bell 10 and we've onboarded a whole bunch of new speakers so that's Dan tapiero of 1rt Pascal gothier of Ledger Anthony scaramucci the mooch himself Michael Sunshine of

grayscale Brad garlinghouse of Ripple Ser nazarov of chain link Matt mcdermut of Goldman Sachs the global head of digital assets Stony kulov Danny Masters the list goes on this one is going to be an absolute blast make sure you don't miss it and better yet make sure you bring your friends we sell a four pack of tickets you're going to get a discount on that so find people in your company bring your boss bring your family bring your girlfriend or boyfriend whatever it is just go you're going to get a discount if you use that team pack run don't walk make sure you go get those tickets today and cheers and see you in Sunny London Town one of the questions that I think this brings up and I'm curious to get your response on this is

ultimately in this intense Centric Paradigm Who are the intermediat I Aries and are we needlessly introducing a new set of intermediaries here which really you know there's a different word depending on which application we're talking about is it a Searcher is it a solver is it a filler is it a builder and realistically what it looks like is we're converging on think hedge fund roughly right think very Crypton native very you know infra um infras Savvy hedge fund or Market maker and what you're solving mostly is is a combination of uh optimization and inventory management challenges and I would be curious har I mean there's in in some sense there's

there's a massive benefit to the user which is these uh the the messages or the the assets basically get to move along the most secure path right the canonical slower bridging path but you're also introducing this new intermediary and you're sort of raising I think another Nuance that gets lost in this is that you when you talk about solving an inventory challenge you it obviously implies the existence or the the requirement to have inventory and so it raises the barrier to entry as opposed to a lot of the original servers or sorry Searchers that were doing this like solving Meb problems on ethereum you had the benefit of flash loans and

so you actually had like no barrier to entry for so it literally could be like one or two person shop so like a 14-year-old out of you know um India or something like that that was solving these problems but now as soon as you have to front Capital uh on users behalf then you're raising the barrier to entry and it looks much more head hedge Fundy so what what would you think about that as a as a trade-off is should we be upset about that does that not matter is that inevitable what do you think yeah um I think it's nuanced so first of all like I think the thing to U differentiate here is like um intense in a single chain context versus intense in a multi-chain context um so intense in a

single chain context could just be like I'm just trying to figure out the optimal route uh through a bunch of open Smart contract protocols to like fill something and there's no the only barrier to entry here is that I'm smart so um you could actually say Meb Searchers in the kind of ethereum M Supply Chain um are um this gets very nuanced when you start doing like sex de Arbitrage or whatever but if you ignore some of those like offchain components um Meb Searchers your only barrier to entry is just being smart and I can get in there and do this thing um in this multi-chain world um what's

really being highlighted by the intent architecture like you said is we are introducing a thirdparty actor and they have a new barrier to entry um in most of these designs which is that they have some balance sheet they have some access to Capital and I think it is a very fair and legitimate criticism to kind of be like that sort of sucks right like um and I'll tell you from my own background like we' talked about this the idea that in the kind of D5 1.0 um you could be because of flash loans be a 14-year-old kid in your parents basement and like liquidate aund million position because you constructed

a transaction that flash borrowed it to do that liquidation is so cool just conceptually like no varied entry per missional Innovation that 14-year-old kid had access to 100 million bucks of capital even though it was like within an atomic transaction right that's kind of cool um so I do think I do kind of like dislike the idea that there is this uh uh uh uh Capital requirement barrier to entry um in the intent architecture however I do not think at all that this is equivalent to like the traditional Financial system um the traditional Financial system you do not

have just a barriered entry of capital you have regulatory like all sorts of things um that are like massive barriers to entry that make Innovation or the ability to actually do something new there really really hard um a classic example is like what you'll call like an isda agreement um it's like International standards for derivatives Association or something like that um and it's a legal document that you need to get signed with all the major Banks so Goldman Sachs J Morgan da if you are going to trade derivatives with them and getting an isda an isda Master agreement signed as a new hedge fund like freaking hedge fund is an incredibly challenging thing to do and you've got just just

like huge barriers to entry so my argument is that if we build uh a a d defi system or like build crypto where you do have thirdparty actors that are providing a useful interrupt service um and they are permissionless allowed to access and leave that system I think we're in a good spot uh I'd prefer they have a capital requirement but I don't think it's the end of the world yeah you know for a representation of isda that was actually in The Big Short if you remember Brad's Brad Pitt's character he actually had to get brought in to help I can't remember the the name of the smaller hedge fund actually trade

or Express their trade um and and I tend to agree with you hard I I think it's it's an interesting idea to explore throughout this season I think another where I tend to land on this particular issue is that creating and managing a Global Financial system is hard it's it's sort of you know if you really examine the assumption that retail anyone in retail should just be able to you know to manage that it I'm not actually sure that really holds up and I think if we can obviate some of the more negative tradeoffs that have existed in trafi then it's probably worth the corresponding benefit to user experience um that we get from this but I I want to

oh sorry you want to no no no I was just going to say like we should move on but um I do agree it's like the kind of the first version of defi like and I was a little bit naive here too the idea of just having these very simple very pure protocols that just like do it all right there's a really nice concept there but the reality is like if you're G to scale this thing to like replace our financial system there are complexities that exist like they just are and so we're going to face some trade-offs here and if we want to build really like we it's the answer is not always going to be the simplest thing even just looking at how ethereum has developed right like the Mev supply chain for ethereum complex and you know no one's trying to make it

complex it's just scale Nuance usability um it grows so anyways keep going Mike I this is a little bit of an aside but it's become popular recently to poke font at the ethereum road map and say look at how complicated this is look at a diagram of how cell phones speak to one another you'd be like this is incredibly complicated you know anything that is large Global you know widely adopted the intricacies of that system I guarantee you are extremely complex and you know I got to defend vitalic here it's like creating a six-year product road map is freaking hard what's the alternative to just not have a product road map I yeah I I I'm like pushing

back on the push back to vitalic in the ethereum road map I I've also had the pain I'm sure you have as a as a a Founder as well selling a vision creating a road map that far into the future is difficult to do to even like 10 people or 50 people let alone an entire industry and get picked apart so I had to defend bolic on that one but I I want to I want to uh lay the ground work here and you and I are gonna talk about this with Chris uh because Chris go has actually dropped a little bit of alpha he's our first interview for the season but I've never referen this a couple times I find it very interesting one of the uh it is going to introduce our next topic which is is modularity but you know there's this is

a blog post from the anoma blog and if there are any intense nerds out there or frankly just blockchain uh architecture nerds out there I'd highly recommend this as a resource but and we're skipping all the way down to the end of uh an article that Chris wrote on the intense Centric topology but the the conclusion of this uh blog is a is a paragraph titled heterogeneous security and the end of supply side blockchain economics and just a quote right now our industry operates on the basis of a world model one might call supply side blockchain economics organized groups raise large amounts of capital to launch new chains recently rebranded to Roll-Ups then dribble it out to application developers expected to build on top demand say for Block space is implicitly expected to follow Supply

without conducting a thorough analysis I attribute the dominance of this world model to the concordance of two factors uh first an understanding of platforms as the primary value capture sync Mal appropriated from Silicon Valley Fang um and the observable power law of assets uh most commonly measured in USD price skip some here an intense Elric conception flips this model on its head intents are demand they come from users who want something in the world and what they want typically isn't to just fill the call for platform operators users care about hand grown organic block space just about as much as they care about hand grown organic cell or Excel cells now users um want block space that follow certain consensus rules Etc but here I'm I'm actually just going to start to paraphrase here basically what

what Chris is said saying is that initially you know people had this mental model for creating platforms that are going to lock you know specific apps into it and if you have the experience of in a in a transaction-based paradigm where you are responsible for having an opinion and actually executing all of the inputs right the the hard-coded inputs then you almost have this mental model of like I need to go onto this blockchain and do all of these actions there's sort of a capture there but when you have a de when you have a demand Centric or an intent entric view of the world um suddenly some of the things it's it's much more people are less opinionated the user about the specific qualities of the block space and they

can kind of pick and choose and this flip from supply side oriented construction or a supply side sort of Paradigm to a more demand and intend Centric Paradigm it has the impact of unbundling the parts of a blockchain that had previously been bundled so the way that Chris defines this is uh four things uh protocol which in the case of ethereum here would be the evm which supports smart contracts a specific security model which is Gasper uh with a validator set a history including a nominal asset eth and a community uh people who self-identify as members and you know previously before this this sort of world of intents if you had an action that you wanted to do like trade something on Unis swap you were subject

because I wanted to go do this thing um I was subject to the security assumptions of something like ethereum I had to I had to get lumped into this entire thing and often like that's how ethereum kind of built its Community as well right like you went to a something on Unis swap uh you maybe traded maybe made some money on Dogecoin or a or whatever was I don't mean to compare those two but just like something in the early days and you kind of sucked into this whole thing right and then you started to love ethereum and all those things were bundled together now this is all setting up the the question that I want to ask you Hart which is the the third big theme of this season is modular it and I think there are a couple of different ways that you could

Define it but let's just talk about modularity within the context of unbundling things and what I'm particularly interested in and I think we could zoom in and look at ethereum here but just to be clear this is a topic that every single blockchain is going to have to Grapple with at some point is you know ethereum is at this very interesting point in the road map where they are pushing users and uh assets you know off of their actual main chain the platform they're pushing it up onto rollups um and in some senses they're actually deprioritizing or not improving main chain performance which would be the protocol uh but what they want the hope is that they're going to be more competitive on the asset their

export their dollar asset eth or Not dollar their their asset eth and so Hart I've got a I've you know how do you broadly think about this idea of when we start to decouple blockchains um from this bundle of things that they had historically been you know if the if the objective of eth is to create this export which is a money like thing how how are you going to compete right if if we're in we're in a world where there's an increasingly large Gulf in between the performance of the protocol and the use of the asset does that question make sense performance of the protocol and use of the asset I mean um Wow Mike there's a lot to un pack here right

like and I want to go back to some of the Chris Go stuff too because it's like super interesting and I'm like very excited for that conversation too yeah but on the ethereum thing it's like and maybe this equates to how I interpret Chris's thing it's just like what does the user want to do um and so I don't like ethereum do they really care about this funny does vitalic really care does the EF actually care about the price of E I mean they do to some degree but I actually really think of those guys as caring most about like hey can this thing be maximally useful to solve a problem and we'll kind of like figure out the economics after um maybe you disagree with me on that but from that

perspective they're like okay we just want um ethereum is a super secure stable thing and there's this mental model where we're going to have the the the main main net be this expensive to use but rarely use settlement layer and we do all the the ligher weight stuff on the edges um and we are really trying to just help users have a good experience here um and I guess maybe and maybe I'm taking this not in the direction you wanted but to relate it back to what Chris go is saying there is this really interesting example when he's being all like this intense maximalist that he seems to be where he's saying hey just

what what the hell does the user want to do like let's build the system to execute whatever they want to do so let's build the thing where the users Define the action and then the block space and the whatever like figures it out and fills uh fills it for them and I guess maybe when you were talking through that um where my head went um and again I'm going to keep trying to make traditional Finance analogies um you have like the CME the Chicago merchantile Exchange is like the biggest futurist Exchange in the world and I'd argue they are the uh the opposite of intent-based they're they're

they're monolithic right they're like here's the way our futures contracts are defined uh here's the way they work here are our margin requirements um everybody like uses this system they have provided a very useful Service uh but they are kind of monopolistic they've got a huge amount of regulatory capture they're I mean they're kind of evil right um right like they just they're kind of evil right but they they Define here is exactly how you use our system right um and I was sort of thinking about that as Chris you reading Chris's quote it's like that's kind of his critique of some of these other kind of architectures and the flip side of that is

like the Robin Hood limit order right it's uh like here's the limit order I want to sell stock I want to you know sell buy this much stock right and I do not care you guys figure out how to fil me at the best price um and look I'm not saying that high frequency trading are good people they're they're kind of evil too but like if we extract our kind of feelings around High fing trading and some of that other stuff you have a system where the user is defining their intent and then the infrastructure is being built to fill that and it's being competitive kind of at every level to fulfill that and when you were reading Chris Go's piece I was like that seems kind of

cool I agree I agree I so I totally agree with that and and I do think a a user Centric view of the world is proba ironically it's it's almost like not the dominant view um in in a lot of a lot of it feels like right it's I mean this was my takeaway from the Meb season it's like where's the user in all of this where's where's their input um so but I think the all right like let me try to get a little bit more specific with what I mean here what if like users are coming and I by the way I'm not picking on ethereum here but I like let's just take the example of Bitcoin right Bitcoin does this thing where it makes the

properties the prop the specific properties that it's chosen to create its block space make it unusable to like do things on right like 10c or 10minute block times right extremely small blocks but what it does try to compete on is his export as a money right like that's that's what Bitcoin is trying to do and if you look you just look at the amount of transactions up until recently ordinals right but like you know for years it was like a one-way trip down like they they had these very intentional this very intentional design philosophy um and I feel like Bitcoin the network chose to compete on the basis of money and if you're money you're trying to compete on this uh this

AIS of kind of like distribution you know permissionless censorship resistance Etc but that makes the network itself much less usable and I kind of sort of see the world dividing in these two like the salon thesis would be I just want to have this protocol that is extremely perform it you can do all of this stuff here I guess the question is what is that long-term going to do to the asset maybe because you know you have to solve all of these problems there are some parts of Solana's design that does make him more prone to centralization maybe that ultimately makes its asset less use like less attractive as a money but I think that's the the reason ethereum gets a lot of this is a they're just the

incumbent they have more activity so they're more interesting to talk about than any other uh protocol but I do feel like they're in between these two these two outputs because it it seems like they're riging more on the we want our export to be money but if they're doing that then they're necess necessarily going to have to feels like they're going to have to make tradeoffs on what the users want to do on ethereum today so to speak yeah I see what you're saying now and man this is an interesting question I mean I agree on the the Bitcoin side where it's like okay we're competing on money we're digital gold like um five years ago that narrative wasn't maybe as settled but it is like more now and then they're kind of trying to break it with like the ordinals thing which I think is

kind of interesting too but like okay yeah so cool um we're trying to be the best digital money right and then I I I do agree with this divide of like other we like we're just trying to be the best smart contract platform we're trying to be the best uh I'll call it protocol not money right um uh I do agree that atherm is like somewhere in between right and I think the specific uh architecture reflects that where the rollup thesis like from ethereum that's where they're focusing on the user and the usability and then like on mainnet and the settlement layer that's where they're focusing more on like the money right where it's like

we're super secure and solid all that kind of stuff and look like maybe that's a really good strategy right where you you kind of have like your different components focus on those different things and um and that works out um I think it's almost like impossible to predict but it goes back to like what we were both saying earlier in the episode where we're like okay I'm really glad uh salana exists I'm really glad Cosmos exists I'm really glad ethereum exists they're all learning from each other and pushing each other uh I'm also really glad this kind of like are we a money or a protocol type question um because I mean I want both man me too yeah me too and and I'm interested to maybe start to

cap this part of the conversation off is I'm interested to understand if that's actually a real tradeoff or not and I'm interested to see the strategies or let's say vectors of competition that emerge if you want to compete on the protocol performant sort of hey come build your stuff here sort of use case or the ass the axis of like you know the prop competing as a as a money essentially and and I'd love to know just like the playbooks and how those two things are different and whether or not there's a real tension there all right moving on to the next the next extra of theme of the season and it's related to this is Network effects this is a cur this is a question that I've

been extremely curious about for frankly years in crypto you know if you if you look maybe and have one lesson from Silicon Valley and the wave of you know web one and web two companies is that Network effects are extremely real uh and probably more relevant in the age of these digital networks than they've ever been and crypto if anything feels like a more pure expression of that so I've always kind of thought that we're operating in an industry with extreme power laws uh the question though is and this is where the modularity sort of complicates that is at what layer in the stack do those Network effects start to take hold and if we zoom in on the definition of like some of the unbundling that's going on between let's say these four layers of settlement

consensus da and execution where does where are we getting the network effects right um is it within like one specific layer of like a layer one blockchain like at the execution layer is it at the settlement layer where all the liquidity sort of lives or is it in an application and ultimately maybe all of our favorite blockchains from you know Cosmos to salana to ethereum ultimately end up kind of getting commoditized and value flows towards the app layer that has the inter the uh connection with the user so Hart I I would be curious um you know i' be hear as if if you walk into the season with any thoughts on or opinions on what layer in the stack uh Network axic crew

too for interupt specifically yeah I think it's um it's still very architecture dependent on where the stun goes um so let's go back to uh like our trpi examples and talk about um like payment for order flow like trading trading stocks on Robin Hood right yeah uh to me there is clearly three layers in the stack and it actually does your what the intent architecture looks like you have the application so Robin literally the Robin Hood app here which is clearly AC crude value it's a venture back business um and ipoed right like it it it's something that acures some value

um then you have the middle layer which are like the hft firms competing to Phil Robin Hood um and what's interesting there is like they make money right um for sure uh but they're hyper competitive I think they could be more competitive like I was saying earlier the season it's not profissional access to do this there's lots of hurdles to become a new hftt firm and so and then they're they do some like regulatory capture stuff and like all that so I don't think this is at all perfect um but I would argue that less um less value URS there from like uh Venture Capital like if you're a VC you're not investing into hft firms they're profitable businesses but

they're not the thing that you invest in right and then like what's also kind of really unknown um is the the sort of settlement layer so there's like settlement Clearing Houses things like d dtcc like weird like Financial infrastructure stuff um and those are also like there is value that acrs there but I think there's a lot more wiggle room about what that like looks like or or or how they value and how that works standards there anyways my analogy there is like um in the intent based uh architecture I think you can make an argument I think in any of these architectures you can make an argument that the user application has the potential to AC value um because they

own the user and that's useful um if there are middle layers that are high highly competitive and like permissionless and open um that doesn't seem to ACR value and like a settlement layer in the intent architecture could also crew value but if we talk about the non-intent based version of this right so we're just sending messages between pipes well okay if somebody can own some of those messages between pipes yeah that makes like sense like it could a crew value um and this is where um you know chain link ccip and tunic like I think layer zero they're trying to Define standards that um they look at like the TCS of the internet trying to

find standards um where you connect blockchains and get people to use those standards and a crew value there right um and I think this is really interesting and really hard to predict because on one hand I want to say that yes if you can own those pipes um even if you're taking like a small fee that's and we go down a world where we send a lot of messages through those pipes so I think in the intent architecture we use those pipes less we still use them but we use them like less than if we don't do the intent architecture um so if we are using those pipes a ton and you collect a small fee and you can own them that does seem very profitable but also like if you have a

bunch of competing standards and there's other free standards and like I you know it's pretty PVP right now uh like chain link and layer zero are pretty PVP um in this too so that's my uh this is where I hope we get to learn more over the season and come up with more develop views here but I think like trying to figure out where value cruise is hard I agree I agree I feel like for me I think I go into this season I've got three three layers that I think are interesting in terms of where Network affects a crew um one and two questions two questions so my my predictions would be

I think they're Network effect at the asset level that's the least controversial right there's lindin if if you look at the way that um you know adoption is played out in currency markets today it's like you know there are hundreds of different currencies but there are really like six that have volume and liquidity right so I I I feel like probably something similar right extreme power laws and network INX when it comes to currencies and no matter how good the routing architecture I think of crypto ends up being I think there are still just wanting to trade in and denominate your your worth in like an asset that everyone else does I think is going to be extremely powerful um so I would say at the asset level I also think at the execution uh level so like

the evm is an area where there's clearly Network effects around right I think the svm is another example there even something like the cosmos SDK right there are kind of these um environments that have escape velocity and once they get going there's clearly some amount of network effects there um and then I think app are ultimately going to have um maybe Network effects is the wrong word but definitely a lot of Leverage um just by based on their proximity to the user I think the the questions that I have the questions that I have going into this season are how do Network effects at one layer of a blockchain bleed into the other and what I mean by that is like here's an interesting question right when Avalanche launched as an evm compatible chain how much

benefit of that ended up acre to ethereum the protocol or E the asset and and this same question got asked when uh Eclipse launched as a an ethereum rollup but it used the svm who benefits more actually the eclipse the eclipse one is actually probably more interesting because it was such a roar Shack test I mean if you were more Salon inclined you were like let's go baby this means more people from eth building and making improvements to the svm and if you were in ethereum you're like capitulation you know even that a lot of people want to come over here and there probably benefits to both but I think trying to quantify that um and another example I would I'm maybe a little bit embarrassed to I I would just love a great

definition of what settlement really means like what does that actually really mean and what network affects a crew there I like that is a I would love to get crystal clear on that coming out of this season okay um I I mean I should probably come up with a more technical definition of settlement but the way I intended right is uh uh there is an action and we are verifying that it happened right yeah so um this is a non-issue when you're on a single blockchain because it's literally did the transaction execute or revert and that that blockchain is your settlement layer so if I'm just

executing on ethereum inet I know whether I settle or Not by knowing whether my transaction executed or reverted right um if if if I'm doing a transaction based thing um once I start going cross chain and it fits very nicely with this intense framework where I say somebody specified the output and then you can imagine okay so this is the output they want and we'll just make it a a cross chain swap they want Dogecoin on um chain chain B the input is ethereum on chain a right so how do I settle that well I I don't let those I don't let the user lose their money until we verify that that happened uh

and so in a cross-chain context the way I use settlement is like there's an escrow so their input assets are held in a decentralized secure way until we verify that they got their output assets and then their input assets are released right yeah so that's my definition of settlement um in this context um but yeah Mike you said like other things I want to respond to I probably won't respond to all of them uh one point I was going to make is like I I think um there is also a difference between Network effects and where value acrs here yeah that's a really strong point Y and I was going to say specifically on the evm and the like svm

like I do very much agree that like the evm has Network effects around it I'm very unclear how uh value occurs there and I think again if we keep trying to make like uh analogies to past events it's like uh Linux as uh standard developed Network effects in all sorts of really powerful ways and it was very unclear how people were going to capture value around that and then like red hat open sourcy stuff kind of did but it did in ways that were like hard to predict and hard to see um you know what I'm going to add in two dimensions for us then I think in addition to network effects there's probably an additional fil

of like value capture and us your lock in like where like where does that ultimately end up happen that's probably the more interesting question actually um yeah who who gets to you know I know this is crypto and it's positive some but come on like just speculate like who who's going to ultimately end up benefiting more and I I just feel like it's a very difficult question to answer but a very interesting one because the world is getting more complicated uh from where I sit in crypto and um yeah that's I think it's interesting question to ask yeah totally and like again you know sure you have just like nothing on the show is financial advice right but it is interesting to see um we do one of the cool things about crypto is you do

have assets that um if there is a narrative or an understanding about how they could capture value like price moves right and so there's a you kind of get real-time feedback around this too which is which is pretty cool all right so that kind of leads into you know we've got three more three more themes that we're going to be exploring you know one we can just kind of uh you know we don't need to go super in depth here but I think it's going to be very interesting to explore this Dynamic of shared security um in a multi-chain world and shared security is actually somewhat of an old concept I think in crypto but it's it's moving back into the four with reaking um so re reaking is of course you know you're essentially reh hypothecating your you know uh

security from the perspective of it's your your staking value from the perspective of ethering the blockchain and using that to uh to provide security Economic Security to other chains and that could be like middleware on ethereum that could be providing security for like operators in a rollup context or it could be Reaching Across into other ecosystems we did a great episode of Shri Raman Zaki um on for instance using re apothec ethereum stake uh to provide security to Cosmos chains um and so you know in there there are different models around the world of crypto you could take a look at over in Cosmos land there's something called interchange security different models of like replicated and partial security there's also mesh security um over in

avalanche they have a very different way of thinking about things but even in Bitcoin there's a project called Babylon which essentially exports um the 10-minute timestamps of Bitcoin and Cosmos chains are exploring um using that to decrease their unbonding period so there there are all these and again just going back to the unbundling point it's almost like you know ethereum has a very specific security model and this is kind of a way of exporting some of the specific security properties of ethereum block space as well as the actual Security in the sense of uh market cap um and it kind of creates these linkages in between chains so I don't know if you have any thoughts in particular on I I'm

just very curious to see um how this particular Dynamic ends up tying uh this blockchains in the future this I okay so it's super fascinating I feel like season eight of Delker is going to be on uh reaking or something like that yeah probably and and I find I am like a huge fan of shiram and Ian ler and some of these Concepts here too um when you're talking Mike I think the idea that's floating in my head right it's um like of course you want to do more with less the whole idea of like reaking is like okay let's use the same money let's use the same Economic Security and do a lot more things with it um which makes all the sense in the world the tradeoff is

that you're moving from uh a world of perfect security guarantees so it can be like this is exactly what's going to happen I have for every uh every doll like I have a onetoone mapping between like my liabilities uh and uh my assets if you will and once you start doing this reaking stuff you move into a more of a problemistic thing it's like in everything but a seven Sigma event uh I should be okay it takes some real Black Swan risk before something happens um and like I actually think that's okay I think that makes a lot of sense um particularly because everything is transparent and auditable and we can actually look at the stuff um but it's different right there's and it's more

complex you want to talk about increasing complexity there is a lot more complexity when you start um intermeshing systems and doing things that should work 99.999% of the time but you got to consider the times when they don't um so it's my only comment on this super fascinating super supportive also extremely complex and like proceed with some caution so completely agree um I also I think done multiple episodes on recking at this point I think we're comes down where I come down on it is it's inevitable the whole point of permissionless systems like the trade-off that you have to make is that they're permissionless you don't

actually get to have a say all the time um in terms of how people use your system so people are going to do it people will probably end up making mistakes with it and there will probably will be some negative ramifications down the line but it is the type of bold you know experiment that makes me excited about crypto and there are massive benefits you know like it's a massive problem new chains um to it's not really recruiting the validator so to speak but it's more it's convincing stakers to stay with you across Bull and Bear markets and why would I lock my why would I suffer this opportunity cost of capital locking it up staking in this protocol that could go to zero as opposed to something like ethereum so the ability I I think what it's going to

end up doing is solving a massive economic challenge that a lot of these new protocols go to and it's gonna just like rollups like it it's going to unlock this Cambrian explosion of innovation but there are definitely going to be some negatives to watch out for as well but another softer element of this as well when it comes to Shared security is this alignment question which sounds like this like silly soft thing but there is a social aspect of things as well like if I'm a cosmos protocol and I'm doing something really close to the metal in Cosmos like for instance stride as a liquid staking provider it makes more sense for me to align myself with someone like the Hub and Source replicated security from them because in addition to these other benefits like the Hub being able to to

provide atom you know to like protocol and liquidity it's also kind of like yeah we're building in Cosmos we're a cosmos thing as opposed to being like hey yeah we're in ethereum you know we we want to do igen layer U so there there is a a soft squishy uh kind of cultural thing when it comes to where you source security from but I'm interested to see when that ultimately ends up breaking down the kind of alliances and interconnections that end up getting built across different chains so I think that'll be something interesting to explore this season yeah yeah the only thing I'll add red it's like from the the theme of the Season like to me I'm actually quite curious how you Mike are gonna thread shared security into this multi-chain endgame right and it's like what where

what does this enable from this multi-chain universe perspective I honestly think you've done a lot more deep thinking here than I have and I'm really kind of curious where this all goes because I think it's less of an interrupt thing I think this is more there's something there that I don't think I quite I quite grasp I'm quite curious to here here's a and I'm I'm this isn't my own observation this was a this directly came out of a episode they did with SH Zaki but consider a world where or the sort of mutual benefits from the perspective of ethereum and Cosmos to use E3 staking so the benefit from the the perspective of

a Cosmos app chain is that paino that I described to you before you know okay when it's a bull market it's really easy to go recruit a network of validator some you know depending on how high quality the project is you know some maybe high quality maybe not the problem is when you roll off into a bare market and everyone's like oh I hey probably a lot of people are just divesting from crypto at large but really it's like uh actually am I really should I really be validating this random chain that's been around for 12 months and I don't know if this is going to work like I want to move back into something that's secure like eth one of the assets that ethereum has is this network of like Diehard stakers who are just going to keep providing economic security through Bull

and bare markets and so the value proposition changes if you're lowering the opportunity cost of capital you can be like all right I'm going to stake with ethereum but I'm going to opt into these extra risk assumptions uh like these slashing assumptions essentially to earn this incremental yield it it it it's much easier from the perspective of a Cosmos app chain and you also have to pay way less because if you from the perspective of a Cosmos app chain like hey stay here like keep your Capital locked up to here your emissions need to go like this right like really really high emissions so you can actually bargain um it like that because the stakers on the other side now have their ethereum locked up and they're just opting into this extra thing you have to pay for Less security so the that's the

benefit to the cosmos side of things on the ethereum side of things there are certain applications that require a committee of of different distinct entities to perform so like an example would be in zaki's case like sellier like you it that can't actually be done by a smart contract and so there are these services that this more modular way of Distributing security unlocks so that eth can get a whole bunch of additional middleware services that it otherwise couldn't have before and now what you had like if you take this to its sort of logical conclusion you had these two very distinct ecosystems of Cosmos app chains over here and ethereum over here but in the world where we've adopted like reaking really takes off maybe you view

Cosmos as more of a design philosophy and really we end up in this like ethereum is kind of this like shelling Point asset you know shared security layer but really A lot of the apps end up looking like Cosmos and the multi-chain endgame implication is again the blurring of the lines in between these different ecosystems where today it feels like a very distinct line in the future it might be you might think of Cosmos just as operating at a different layer of the stack than as as ethereum operates and it actually doesn't feel like a distinct ecosystem at all so that that is that is why I'm interested in where shared security ends up shaking out yeah okay okay you made the connection for me that

was actually really useful um the way in in the multi-chain context um reaking and things like I lay are a new Tool uh that makes it frankly cheaper to start a new blockchain and innovate in blockchain space whatever so yeah obviously that's going to influence our multichain end game like we have a new tool that uh very in a very clever way makes it a lot cheaper to bootstrap a new consensus a new chain um and that could and probably will impact like the market structure of how this multi-chain world uh uh ends up looking because of the benefits and usability of this really cool I'll call it a tool but it's just a really powerful concept um I got

it I understand now why where shared security fits in this multi-chain question and that's cool cool man this is gonna be a blast to explore and it's there's there's so much Innovation that's going on in that space as well so I'm just really pumped to talk about that this season all right here's um one more that we' we've already sort of covered because it's a little bit of a a catchall but it's an important question this idea of chain abstraction so again it's the idea that I think a lot of people have implicitly accepted this assumption that we are not the user experience of operating crypto today sucks chain abstraction it's almost like if you're coming from an ethereum background and it's account abstraction how can we abstract away this uh sort of technical spec of ethereum the idea of

accounts and transactions like chain abstraction goes one layer deeper and says if we're going to be in a world of multiple chains how can we abstract that experience entirely away from the user and we're gonna we're going to hear from some folks in both Cosmos and near actually that are doing this and we'll let them Define it it's kind of a uh catchall for this idea of how to abstract this away but one common element is this idea of multi-chain accounts or interchain accounts where there's a controller chain where you custody your assets and send commands from and host chains where those actions actually sort of take place and and happen um and I think that the question of what are the implementation details

for how that actually happens is a super super interesting one um so we actually don't need to go much more in in detail there and uh well that'll be the I'm s to say no go go go no no no yeah I it's just it's a it's a yeah it's a it's just it's gonna it's actually one of the episodes of this it's it's gonna be with Sam Hart and ilot and it's one of the episodes I'm I'm most excited for this season um okay let me give you my two my two second preview one sentence preview right so okay we will let them Define chain abstraction but generally speaking I think there's this view that like at some point hopefully not super far away users just use the application and they

don't know what blockchain they're talking to right that that's great and back to your analogy of like all right so these blockchains are like they have different trade-offs and we're kind of connecting them um and I think that there's this really interesting path path you can take of is this more like internet systems getting connected or more like Financial systems getting connected um and what I mean by that is if it's internet systems getting connected in this chain exraction user just does a thing and then it maybe looks like connecting them as like TCB IP we're just sending messages between these blockchains right but if they're like Financial systems getting connected then actually it could look quite different and this is maybe a little more of the intent thing here too where

you're you're like um the whole idea back to my bond trading days is um uh a market maker principles risk they like fill the user with their own money user has a really great experience they're like done and then the the the third party actor figures out how to um hedge their risk or something like that too and so I think one of the things I want to push on all this chain abstractions stuff is like yeah we're connecting blockchains so users don't even know what blockchain they're talking to but does this look more like connecting servers with the Internet or does it look more like connecting Financial systems with financial settlement um I think that's gonna be

super fun I don't even know if I have an intelligent way to answer that but that is such a good question that's a s super interesting question and one that I think we should delve super deep into because uh blockchains have a little bit of both don't they um and and if you look at it it is often important I the egoism that I'm maybe most familiar with here is Cosmos but there are many instances of General message passing of something that looks like business logic from one chain to another that are critical to the design of applications like stride for instance if you liquid stake on stride you know there are message passing that happens across IBC you know to go to another blockchain to actually deposit I mean they're very Mission

critical things so there there is a blending I think of value and uh messages that could look like a mix between frankly the internet and the financial system so super interesting question to ask all right final question of the season because this came up a couple times when you and I were having our ideation sessions before this season is what how would we Define what a satisfying outcome for crypto a multichain crypto end game looks like and we talked about this initially within the context of intense where you know maybe maybe this will resonate with people who are listening to this podcast sometimes when you talk about making things like comprom that feel like

compromises like maybe it's not going to be everyone uh self- custody everything and holding all their own assets and maybe it's okay to let some actors you know do things on your behalf right or maybe you know within the context of something like Unis swap um it's good enough to have like permissionless systems here we don't need retails lping and I feel like there's this common as soon as you start to push back and be like hey maybe some of those early ideas weren't super pragmatic people throw their hands up they're like well then we should just be in Trad fi and I think what we would like to show is that there's a lot of gray space and and area where crypto can improve um what exists today um without just you know making

some more pragmatic adaptions to to maybe what we originally thought so Hart I I would just love to get your thought on if you had to outline a couple of criteria or specific conditions where in your mind crypto will have been successful yeah what would that look like for you oh maybe I'll get roasted on Twitter for this um here's my bare case for crypto right and like this multi-chain future um my be case for crypto is we repl we replace the trafi rails so like trafi just used uses crypto rails right um and to be clear my bease here is actually like

really freaking bullish like actually if you were to replace the tread flly rails with crypto that's a lot of usage and it's going to make for a better Financial system but I call it my bare bare case because um there's all these risks of these elements happening that um I don't agree with like philosophically so let's call it like permissioning like a lot of Access Control through this network or something like that that isn't this Global permissionless Financial system that I dream of but it would still get a ton of usage and this does fit with like the multi-chain endgame here because like you know you are seeing like the real world asset narrative and some of the like the Black Rock chain JP Morgan

chain uh type narratives out there they CAU up fit in this bease where we're like okay we're not Black Rock and GP Morgan and then like a couple starts run their own chains and own applications won't connect them right and you're like all right that's going to you lead to lots of blockchain usage but it is in a sense deeply unsatisfying because it is not um it is not a permissionless nor be super Innovative like what's the new [ __ ] we're getting that's getting created here um the bull case uh is like YouTube and I think I'm stealing this from fredis from a long time ago right right um me forgetting the context but you

know on YouTube before YouTube you had sitcoms and like romcoms and movies and stuff and then YouTube comes around and you have like you know people unboxing videos and like all this longtail content that no one even knew was going to exist um and uh I look a little bit like our our endgame here from like the state of the world I want is okay base case is we have Financial infrastructure bull case is that nfts crypto games um ways of supporting artists all this stuff we can't even imagine um is actually enabled by this like efficient permissionless blockchain infrastructure all right I like that a

lot and I'm gonna outline for me I had to think about this a lot I'm going to Outline Three specific things that I that I would want to see out of crypto overall and you actually gave me one so I'm literally stealing one from you but I'm going to say I think one of the the facet that you actually outlin this to me is that one of the big differences between Financial system as it exists today is Global versus local and I think one of the big differences that you get from a user standpoint it's actually much much less to me this is why I don't get really excited about payments because I'm like a I don't think a lot of the people that I there's a misunderstanding where the cost for

payments systems comes in and I'm not really sure it's a tech problem so there's part of me that just thinks that but also it's like that doesn't I it's not like you're getting arduously ripped off within the within the jurisdiction of us for payments that's not really you're not getting charg an arm and leg for that for the most part but what I think is really good if you look at it from a global system is relying on cryptographic assurances versus local regulatory assurances so again this is part of the reason why it's so difficult to explain to people in the US you know you can put your money in a brokerage and you have really good assurances based on the legal system that exists here that that's not going to get ripped away from you but you do not necessarily have that if you live in

Russia or some third world country or something like that they or if you're a Russian or if you're a Russian central bank right relative to the US right there's clearly a lot of uh yeah there not very safe from your perspective either so I think giving everyone a set of uniform assurance for property rights that are based on cryptography and not whatever your local politicians are feeling like at the time that is a super strong value proposition then I think another value proposition is distributed ownership so you know I what I would hope I have these discussions with a buddy by Miles all the time but I would love it if like tokens just decreased the friction in

issuing Equity to the point where we rewrote our laws around issuing Equity what defines a security and making it easier to distribute to employees and even customers like we just need to we need to take a hard look at these laws around Equity because they make no sense three is just transparency sunlight is the best disinfectant like creating a system where there's just you know a hundred times more transparency all of those things if we got that out of crypto I'd be happy like those would be good enough for me hell yeah Mike um and before I forget on the transparency Point remind me I won't do it now but to say like the on the

Goldman trading floor when middle financial crisis and our swap desk one of the best swap stks in the world having like zero idea what their risk is like within the nearest hundred million dollar Mark right um and the lack of transparency caused by uh a legally enforced uh Financial system where in crisis mode legal enforcement the ability to rely on that basically goes to zero like it's IT addresses like two of your points around the problems with the financial system that is based on legal enforcement and the lack of transparency because of that so we'll save that for later in the season yeah get leave some uh leave some Alpha for listeners you know one thing that I

would be curious about and we can I know start to wind down here is you know historically people have viewed crypto as a sort of a counter reaction to government overreach I think that's probably a good way to view it but it's something very separate from government I think probably you know crypto is just coordination system I think ultimately I'm very interested to see what happens when government becomes a stakeholder within cryptoeconomic systems like that because I've never view like we're not GNA I'm not an anarchist here I'm not here to end government like that would suck um you know but I'm interested to see you know there's an interesting the global nature of crypto you know kind of

pits Game Theory against one government versus the other and I think Olaf Carlson we actually had a recently had a great example of you know these incentive uh systems that like suck you in and you become sort of working within this um incentive complex that you know Bitcoin or ethereum or whatever creates and I'm excited to see when government ultimately ends up getting sucked into the incentive Vortex because I think it probably will I think it is happening already um but to totally man totally like um you know economics I look at is economics is a study of how to incentivize human behavior um blockchain systems are a really interesting tool for um incentivizing human behavior um I

mean you could get some philosophers on here too right like religion interesting tool for incentivizing human behavior um our Western liberal democracies interest tool for incentivizing human behavior capitalism interesting tool but generally speaking I agree with you that uh crypto systems use Financial incentives to incentivize human behavior in really fascinating ways and there is uh absolutely government will use this to incentivize human behavior in a societal construct uh I just yeah I hope the government uses it in a reasonable not dystopian way that'd be nice same me too me too man um well Hart this is going to be I'm just so pumped for the season I think

we're I think we're doing a good job of breaking off some you know in the weed sort of technical components there'll be some very technical episodes but also we want to do a good job of zooming out and setting context for you the viewer about why we're talking about all this and you know hopefully um you know the goal for these Seasons always is for HART you and I to maybe update learn some stuff or maybe update some of our priors and for everyone listening if you're going in with a very specific worldview about how this is all going to play out you know we hope you at least think hard and maybe ideally even change some of your opinions that'd be a good outcome hell yeah cool yeah all right buddy pumped um all right everyone excited to have you along the ride with us uh first episode

is going to be Chris goes of anoma and that's coming out next week so make sure you tune in for that thanks [Music] Mike