Vitalik Buterin: Ethereum - MEV, Staking Derivatives and Privacy (EthCC 6) #505

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization in the blockchain revolution I'm Sebastian cuccio and I'm here with my co-hosts who do you think I asked and Brian Crain lovely to have you here and we had this opportunity uh to be sitting down with vitalik buterin hi everybody thanks for doing this good to be here yeah it's great so the last time we sat down at HTC was two years ago in between 21. two years ago not last year no we didn't do it I don't think okay right there was a you know it was in this Grace studio with remember like the screens and the whole camera setup and everything very different setup but nonetheless uh we're very fortunate to be here and we're very

pleased to be in your presence it was a different different time this is the at the height of uh crypto Euphoria how have things been since then and uh how do you how do you feel about the ecosystem generally I mean you know it's definitely a little bit less uh euphoric now but uh you know after the Euphoria you always have u5 and U6 and U7 and you just have to like you know do a bunch of hard work and uh I feel like the hard work's actually been happening like from a deaf perspective you know we had the merge then um you know on the road to doing gang sharding I mean it was a ZK EVMS kind of actually exist um just the decentralized um or semi-decentralized end of ethereum

based social media that I talked about at ECC two years ago kind of actually exists yeah yeah like it does actually yeah feel like a lot of stuff has been done I mean so I I don't know I feel satisfied great and uh yeah what what did you uh most appreciate about ECC this year what what are major highlights I felt like it's serious see or I guess kind of Greater if cc is so like everything that's been happening in Paris this week did a yeah good job of kind of being coherent and uh being well organized together like I remember last year there were a lot of cases where I had to like go Uber bike 25 minutes to

go to like some side events and like that happened multiple times and uh this time like everything is much closer together uh but this time there was like a bigger selection of interesting stuff like it's it seems fairly you know plain dealt to kind of not interfere with each other too much right and uh you know there's uh a lot of different things for different people I mean obviously you know the you know the core efcc itself has expanded a bunch like you've you've taken over like the the neighbor building to now right yeah at least I saw that on the map yeah there's there's now two two buildings which is yeah and an extra day good yeah like you feel it feels like it's uh

I'm doing a good job of uh scaling while at the same time not becoming terrible which is like a harder problem than it seems but you know it seems like you know you're doing a good job of it you know has there been anything uh that I don't know surprised you or like knew that you've learned that kind of has maybe yeah changed your thinking or risen some kind of new curiosity well last week Justin told me about how you can do is it um complicated ZK snark protocols just using lookups and I thought that was really cool Oh Oh you mean about the event um it's a good question like it's always

there there's like never one thing it's always a combination of uh a whole bunch of things but like the general impression I get is just um of you know quinceaner ongoing progress in pretty much every area I as we talked about this before we started the interview um none of us has actually seen any talks other than our own I assume I have seen some I mean I saw I saw metallic star for a couple for a couple of minutes for um which ones did you see Brian I saw diagnosis pay talk oh of course yeah I saw the steakwise talk then we had two team members from corresponding if talks one about staking and one some Eve staking tool and I saw your talk this is

like five there were a bunch of announcements so are there are there any things where you feel like you you'll need to catch up one once you're like uh in your hotel room again good question I'm I'm sure I will yeah I mean I'm looking for looking forward to you know hearing the things that have been announced while you know continuing to be Asia in the process of it's like getting helping to coordinate the whole account obstruction effort and researching I'm you know getting a better understanding of proof of personhood protocols and doing a bunch of other stuff but I'm not I will get I will get to um learning what the announcements are in uh acceptable as you time I promise

so maybe we can get into the topic that it feels like it's been kind of the dominant Topic in uh crypto for a while so the topic of Mev and this whole thing of like Mev Pipeline and what this will look like I'm curious what is your if you know I kind of thing is like zoom out and think far ahead and you know you think sort of in ethereum in a state of you know maturity and stability uh and the sort of end game what do you feel like that should look like yeah it's a good question it's definitely one that lots of people this week in various places have been talking a lot about

hey I mean one of the big directions that we've been moving in for the last couple of months is the whole in shrines PBS um thing like we've actually taking this uh Market where proposers cannot like basically gem auction off the contents of their blog to other more specialized actors and put that whole thing into the core protocol so that we don't have to deal with the yet you know extra complexity interest requirements of things like relays so that is uh I think interesting and going to be important there's the whole question of like what the market will look like on the Builder side and I feel

like you'll have monolithic bird Builders or Builders and Searchers uh coordinating with each other or something else and like for that I don't know I guess we'll see the cross domain Mev issue is interesting right like that was always described as like the big reason why you might need to like share proposal infrastructure across different domains and like why you might need even more complicated mov constructions I'm like I feel like there's some probability that's true and there is always some probability that it just turns out not to be a problem like basically yeah the intuition for why would be that like Mev involving a price discrepancy between arbitrary and optimism can always be decomposed into like a separate price

describe and say between arbitrary and binance and the price discrepancy between optimism and binance and so you don't actually have to like be on both chains you just have to be like be on one chain and to be on binance and like that's uh like that's always been sort of the theoretical argument for why it might matter less than it's a sort of theoretically seems but like I don't know right like it's uh possible that in uh two years um you know the centralized exchanges will all be like either banned or dead for various reasons or or they'll just fail and be out computed even if you want to be on the bright side and uh the yeah price Discovery itself would happen I'm you know on chance in which case that would work look even more different yeah like I think it's uh important still to keep an

open minds to like future possibilities of how the market turns out and try to create infrastructure that's as robust as those different possibilities as possible you know what a sort of the desirable characteristics of that end State you know does it you know for example in terms of economic value or I don't know some other properties that you want to be maintained I guess like I've I've never been much of a finance guy in the sense that like I honestly don't give a damn if the trading spreads for a meal for it's inverting a million dollars of each the usdc are 0.2 percent or 0.43 um my biggest uh concern is like whether or not this uh creates an externality

that will um you know accentuate staking right but basically yeah If it creates incentives by which I'm you know larger stakers are benefited disproportionately from floor stickers that creates pressure to create bigger seeking pools the greatest pressure to join existing ones that might even create pressure for the the decentralized taking walls to become less decentralized like it creates all kinds of nasty effects right and this is all part of a larger picture right because the Mev ecosystem is not the only thing threatening staking decentralization right like just uh the Asia existing Amino bad user exp user experience of staking as it exists today which can only be improved with uh like basically improvements to technology and

just like a better code and better interfaces there is the whole restaking issue and you know the whole issue of using stake as collateral and like the whole question of like whether or not I'm you know staking large amounts can be safe and like does that involve distributed validators right like there's all of those concerns and I feel like the Mev ecosystem is only one of them and so I really hope that we can you know continue to make a yeah like a highly decentralized staking ecosystem possible and it's like importance to you know recognize all of the pressures that might be going against that into a as good a job as we can of addressing them

do you think consolidation is not like is inevitable though I mean look at the way Global Finance is consolidating major corporations are consolidating sort of in the traditional world do you think that those Dynamics are also you know to some extent inevitable on chain I'm like basically the question of uh you know whether or not uh decentralization is fundamentally impossible um yeah yeah um I think uh well I mean the thing that is possible is that uh um like maintaining decentralization will require incentives other than in protocol hard-quoted coded incentives I mean just the morals of ecosystem participants is like one example um another example of things that can

cause more decentralization is uh I mean sometimes where regulatory pressure causes it um sometimes like if protocols end up I'm you know having things like public goods funding then like that funding can um you know intentionally subsidize everything but the largest singing pool right so like there definitely is a possibility or like hard-coded stuff is not enough and we have to like start actively doing more I guess Soft Coated things yeah so I think what we've seen a lot is kind of people going for liquid staking Solutions because you get liquid staking derivatives which you can then use again something this which Ben I mean a very tangible benefit that you don't have if you kind of stake yourself or stick with

a very very small staking provider do you think there's a way of kind of um making a Consortium of kind of homesteakers and small stickers and so on that they can kind of issue their own um liquid staking tokens and so kind of preserving the decentralization while at the same time not putting opportunity costs on the people who are actually there to be the decentralization yeah and I think it's the challenge with that right is that you would have to have some kind of like trust system involving who is allowed to participate right because that's like from the point of view of an attacker who wants to break the chain right that's uh you know you like that attacker would of course want to join this system and they because if they join this system then like they

would be able to go and like use the thing is collateral like take out some other stuff and then they would not like suffer the full cost of being flashed anymore right yeah so if they do that like if they're able to do that then like you know could just basically attacking the protocol becomes cheap much cheaper and the yeah of course in that case the staking protocol itself is going to end up losing a lot of money right like basically all the honest participants would right so in that case you would need to um have some off-chain way of like filtering out like basically trying to only let me one way to frame it is to let go guys and don't let bad guys into a staking protocol but like another way to frame it is to like put a Max on the

participation per person right like that's another good risk reducer because uh you know an attacker is likely not going to be 10 000 people and then the totally other possibility is like if there's some like change to staking economics that we haven't understood yet and like I mean Justin is like a big fan of uh one-time signatures for example which is like right now you know utopian total far out cryptography but five years ago ZK VMS were utopian far out cryptography so you know like I'm what are 110 signatures um basically it's this Quantum technique that allows you to create a key where essentially it's like for every nonce you're only able to make one signature

because uh when when you make your first signature like that actually destroys the superposition so you're not able to sign any other message but what is the significance of that the significance of that is that it makes double spending like literally or or like like self uh slashing inconsistency like literally impossible Quantum slashing prevention that sounds like it's more than two years out though oh totally but but how would that impact the staking ecosystem oh because like you would literally not be able to sign two conflicting blocks and so if a block gets finalized like whoever finalized it they would just totally not be able to find why something Computing so then the advantage would be there's no slashing

needed or well right the exactly well that's or if it's uh if it's a used on chain like or if it's used off chain then like you as a Staker would be able to use this key scheme and you'd be able to prove to other people that like you're not slashable and so everyone would accept you in their pool okay yeah but then one thing to note about that scheme is like like self uh contradiction is one way to get slashed but the other way to lose your money is an activity leaks right and it's like sometimes making yourself more defensible against one sort of like weakens your ability in the other case and yeah like you you have to like make sure you have both covered okay and what

do we what do we do until then so basically it sounds like you were talking about morals of the ecosystem and so on you think there should be like a social consensus that we do not do liquid sticking and we do not do restaking it's a it's a good question I mean I what I would prefer to see it is um I I mean I think just like tell like in the you know in a DJ and heavy ecosystem just telling people not to do stuff doesn't work um work harder to make versions of these things that have the properties that we want and like possibly make some trade-offs until we're ready with the technology to sort of do them fully properly but that try to provide those

properties right so like with one-time signatures for example the utopian thing is uh the quantum stuff that thing today that makes uh trade-offs would be yeah keys and trusted Hardware right and like you could imagine a system where Euros a stake are only allowed to join a staking pool if you put your key in or if you prove to the thing that your key is in a trusted Hardware module that prevents you from like citing two conflicting messages and in one ebook right so like that is an option another option is to like me like look at all of the major applications of lsts and basically create um Alternatives or possibly you can like help the existing ones like maybe design

themselves in a way that's still a staking friendly so right now right um Lido is very dominant when it comes to liquid staking and it seems sort of their uh strategy is you know one to view that okay liquid staking is a sort of you know winner take all type market and then you know obviously like though wants to be that winner and then to then try to sort of you know minimize the protocol and try to uh you know minimize the role of governance and stuff like that so obviously that would be like one outcome that's possible Right Where like maybe that happens like becomes very dominant uh I know of course there are like other outcomes that uh could play out when it comes to this liquid staking

Marketplace what do you think would be you know most desirable and what are some scenarios that you're worried about yeah good question I think like what the desirable outcome is we don't I like I think we can admit that we don't fully know yet um what the scenarios to avoid are I mean one is uh you know if uh Lido governance ends up uh like dominating and like one is like a lot of governance could get attacked right um the um other you know you know the Widow smart contract system has a bug would be another one

um a yes third would be like it's a like lighter governance tries uh throwing its weight around in some kind of protocol um you know decision and I think if letter goes one way in the ends of the community goes the other way then like you know the researchers are fully intent on like stamping their foot down and saying like no we're doing this and uh if 64 of the stickers disagree but the community agrees then like guess what the 64 of the stakers are just going to go in activity League themselves right I think there's like within all of the people I've talked to there's definitely a strong willingness to like say like like let the two big to fail people fail I mean you mean that would

be like a hard Fork basically right like it would not be a hard foil like like to be clear I don't mean like a hard Fork like targeted to like a you know like abort east of these systems or anything right like I'm against social slashing right I mean Asia hard for like if there's just some or what hard Fork on some governance issue that's controversial for other reasons right like things that the community like the community cares about that uh like let's say for example if the community is uh you know more on the lunar Punk side and wants to um first you know preserve the capability you know improve capabilities of strong privacy improve anti-censorship and approve all of those things and it just so happens that dominant eat holders end up being like BlackRock types go on to

like submit to the Iron Will of the governments or whatever and uh you know a uh if a hard Fork comes along then if it like some eip's come along that are popular that where you know that improve the chains censorship resistance for example and uh you know large etholders are against it and they try to like coordinate against it by yeah you know doing proof of stake 51 attack stuff then like in that case basically like the you know they'll be ignored right that's uh like I think there's a yeah like maybe in my observation there's a strong consensus among the developers researchers Community people that I've talked to about that

so you you talked about we mentioned this briefly at the beginning decentralized social networks and you know your enthusiasm to seeing those uh become reality you know one of the issues there and is is the data the potential for data data harvesting and I I wonder if you know broadly as an ecosystem we're I mean obviously privacy is is a big component of you know crypto research but do you think that privacy is being sufficiently prioritized in development road maps across all blockchains not only for social uh for social media applications but I think there's a broader

implication um that privacy is to some extent essential for the functioning of capitalism because capitalism exists because of the it's driven information right it's also essential for the functioning of democracy correct yeah are we are we going uh in a direction where privacy is not being prioritized enough for these things to become mainstream it's a it's a yeah good question and it is something that I worry about and I mean I've obviously been like pushing hard for privacy protocols to continue to be developed um I think uh there's definitely a big need for this stuff to happen and like even just zooming out from Beyond the crypto space right like we're basically

in this situation right now where stuff all around the world is being rapidly digitized and a lot of the time that digitization comes with forms of privacy that our civilization has had for thousands of years just suddenly being erased within a decade right and like you know we saw examples of that during covid there's examples of that in the context of the whole casual Society Asia I'm going to transition that a lot of governments are pushing and you know cbdc is potentially being a part of that um the way um you know the proliferation of kyc for a whole bunch of uh use cases right like there are huge amounts of uh you know privacy that are very quickly being lost and no one

is really presenting an alternative and they think the place where the crypto Community really shines it's like it is in a place where it actually can provide a credible alternative with uh you know enough execution power to actually execute on it but like it needs to actually do that right and so examples of that are I mean one is obviously payments right like where you know about to solve the most basic uh payments privacy problems first and I've been a couple of um I guess you know over the last um you know a couple of years the whole tornado cash situation happens and uh I think there there's a

in there's definitely Aji people who were kind of scared off from participating in um you know privacy protocols entirely which I think is uh I mean in some sense it's uh a huge overreaction uh just uh because like even you know if we look at the law itself right like there's you know lawsuits against the government's ongoing challenging their ability to do what they did but more generally there's um Asia like zero knowledge proof technology it creates a lot of opportunities to create privacy protocols that are a kind of even sort of stronger and better for everyone in a lot of respects right like one very simple um example of this this is the proof of an innocence approach

that you know chain way yeah this lovely company from Turkey created and uh you know I mean solomoni has been a fan of and lots of other companies we are basically yeah when you are withdrawing from a tornado cash type system you would be able to specify like which subset of deposits you are withdrawal came from right and you basically be able to say like hey I'm a participant in this scheme and by the way I am not one of these 35 recognized D5 hackers and if you do that then uh if you make that be a default then basically almost everyone will be excluding the 35 defy hackers and so it's a 35 di hacker as well end up actually having a much tinier anonymity set right and so

there's techniques like this which are being actively worked on and I think you know really should be working on on them a lot more um there's uh right now on ethereum this stuff is happening more at the application layer and I think one of the big reasons not to do that on base wire right now is because we just don't know enough about the yeah the underlying technology for it to solidify that much right like all these schemes the USC game snarks and like we don't even agree among the experts whether Nova is the future or whether a 64-bit Goldilocks Starks are the future or whether the lookup Singularity is the future right so like how you know like which technology stack are you even

going to use right how much do you think this is a kitro problem because basically I mean you know I'm the Italian Optimist I think we can build almost anything if we put our minds to it but basically how much do you think the average person actually cares about these privacy issues because basically if you look at kind of the track record of kind of the Revel relations over the last say 10 to 15 years it seems I mean there was like a little bit of an outcry at first but then everyone kind of it was yesterday's news right and basically now it's kind of just the status quo and most people uh do do not feel very strongly about this it's a good question I mean I feel like in some ways this kind of resignation about privacy is

sort of mirrors the resignation of the resignation toward like biological death from Aging for example which is like people end up sort of thinking like okay yeah it's fine because they don't see a viable alternative in front of them and uh the uh like the like one part of that is like the alternative has to present itself and the alternative has to present itself in a way that it does not require like massive sacrifices of uh inconvenience right it's uh like it's uh you know like it's it's about making the comparison between uh privacy and aging here intentionally right because there's the whole you know Twitter uh this is a sort of a meme that like oh you know these people are getting up in

the morning and having their 84 minutes on us at 67.2 degrees and then eating 500 pills and then eating 325 milliliters of uh you know vegetable pudding and like you know you're living longer but like what kind of Life do you have right and like there's in a lot of these idealistic things there is like a big dimension of like sort of turning people off by uh sort of putting front and center the options favored by the Geeks that involve huge amounts of work when like we know the real solution is like for this sort of stuff to be adopted it has to be affordable and service of money it has to be affordable in terms of time it has to be like basically automatic and the defaults right and so I am fully on board with privacy

becoming automatic and a default in the ethereum ecosystem that I don't think that involves privacy being on literally on layer one because uh the D like the default isn't the chain the default is the wallets right and so if you have major wallets that support it then you know users can go and send things through privacy contracts okay about wallets and the kind of abstraction in privacy and kind of how to kind of so basically smart contracts and privacy is notoriously difficult to kind of marry yeah but at the same time kind of smart contract wallets in terms of account abstraction and so on seem to be the go-to what do we do the what do we do about well like what

what problem like um smart contracts and digital identity oh I see what you mean identity is a complicated word because it like mixes at least four different problems into the same concept right so there was like identity just in the sense that I prove that like I I The Entity that did this previous action some time ago also did this action right and that's like the most basic form of entity that's like a you know a cryptographic key then there is identity in the sense of like I actually attest specific things about someone else right you can like this could be world of trust or you could have centralized versions of this and like that and that starts getting into things like uh um government kyc which is probably big

enough that you know if it's a third category and then you know you have the unique proof of personhood problem where you care about someone being a human and not a bot but you don't really mind like the exactly which human you are and you're trying to keep that private right like there's this whole range of things that people put in the identity box there's uh like you know I sort of roots of authentication like uh you know if you lose your account for one service like what service do you do you use to recover it and like a lot of the time that's been um you know Google or Twitter or WeChat or some or phone numbers or some of those and uh in that case centralized alternatives are

actually pretty terrible right like uh you know there's this uh culture of using phone numbers for things by defaults but then like Sim swapping attacks happen all the time right and like even even these Google accounts like if you lose your passport or password a lot of the time like sure theoretically centralized services are better because you can always um you know go and call the company and get it but like in practice I know I've personally known people who have tried to do them they've like literally failed right so there's uh I think the way that I look at this is that like we as uh you know in the crypto space like we should be ambitious in the sense of like well what are we trying to create a separate stack

right like basically think like literally trying to create an alternative to the centralized Tech stack to the same level of depth that like for example you know in China there is a Chinese text to Accurate except in this case instead of being more centralized it's less centralized and so you know gotta replace go you know take out Google put insign in with ethereum you got to um you know replace PayPal put in um you know crypto payments uh you know you have to put in actual actual privacy Solutions replace kyc put in like you know whatever your favorite proof of proof of humanity is right um like actually be ambitious and like build that stack um and identity is a big part of that and I think that like that will be able to

both solve problems within the crypto space that we sometimes use the word identity to describe but also hopefully serve as a demonstration to The Wider world of like series and example of all of these Technologies kind of working together in a coherent way and solving those problems in a way that like actually does um protect privacy and so one example of this is uh so in you know as a result of this kind of mean you know pop-up Mini City that we did in Montenegro in the spring one of the applications that we worked on while there was uh this thing called zoo pass right so I can actually take it out and show it for our video

um listeners right now um okay I gotta switch to my profile because that's uh on graphina West that takes uh five seconds but it's still uh much work to uh convenient than I expected open up the app zoo pass.org and one two Circle rotating and this is a QR code this QR code is a zero knowledge proof like it is azknark I believe growth 16 but I'm not exactly sure it could be a plug proof or something else too and this proof proves that I am one of the residents of Isuzu without revealing which one right and this is all done like within this nice really convenient application like it

has a QR code and um you know people like even just a you know like security guards with uh like one hour of training or less like they can you know go and scan it and verify it um you can there's an online component you can use this to log into websites there's a system called Zoo pool where you could use this to do Anonymous voting so like only people authorized by the system can vote but you can only like but you can't nobody not even the operator of the system can tell which specific person made which specific vote because like ZK snarks I kind of break that link but they have the same but they preserve the property that only authorized people can vote and voters can only vote once right and like this is basically like

you can think of it as a small-scale e-government solution right and this was applied to like about like 500 people and then once you go up from there then the next step is well can we you know apply something like this at ethereum conference ecosystems and then it's ten thousand and then can we go up from there and uh I mean we'll talk about small countries and get up to a million right and so there is I think an opportunity for the community to try to work together and like actually demonstrate to this whole um stack working and like I think to be queer like this is not going to happen just because of economic incentives and this is not going to happen because like like I'm not expecting like literally Asia you know like more than 50 or even

more than like five percent of uh even ifcca attendees to be willing to like put significant amounts of effort into a minimum the kind of you know bearing in like highly inconvenient applications just because um you know this stuff is cool and ideologically important right I'm expecting I'm gonna groups of developers who do tend to be passionate about all these causes to build things um and uh for you know the ecosystem to adopt it and you know once uh these kinds of things become adopted and once these kinds of things become defaults then you know more and more people can start participating and like it's not just a uh um

you know kind of accept annoyance because you value privacy that much thing right it's also a cultural thing it's like uh you know we we do need to I think make like all of these uh privacy Solutions like Asia really yeah you know importance and like cool part of uh the good side of uh of crypto culture right so like this is uh one of the things I'm hoping to see happen and then you know at the same time in the in the protocol with payments um there's a huge amount of technical work that's left and a lot of this stuff is only viable on L2 because of transaction fees and so users have to actually move to uh to layer two but you know fortunately a lot of these privacy systems are already launching on

layer twos now um so it's uh it feels like things are moving in a good direction and it feels like there is momentum but like that momentum definitely needs to be created and maintained and if the people who could maintain that that momentum don't then like things this could very easily slide into being a a lost opportunity which would be yeah you know really tragic and like we took her totally end up being in a no privacy World 15 years from now so hopefully we don't so um yeah you're talking about and I guess this sort of alludes to the larger Topic at least one way of I guess

phrasing this is the sort of kind of network State type idea and you know you mentioned the this identity thing as kind of like one experiment that's happening there I'm curious like what are some other experiments happening in this area that you think are really promising yeah so I think there's a lot of things that are valuable in or that like could be done in like these things like so solo like basically yeah like the category is kind of communities that start online and then materialize offline right which could be temporary could even be permanent right um is uh that there's just a lot of things that become easier to do when there is a yeah community that is uh

like an actual in-person community that does all of them together right I mean the easiest example of this I think is universities right like people have been excited about like using Coursera to displace um in-person universities for like 15 years right I mean I remember when the first moocs were coming out like I literally participated in the very first ones on uh machine learning and artificial intelligence Rabbi Sebastian's Ron and Andrew ANG right and like I think 10 years later like that's partially happened but there's still a large extent to which it hasn't and like there's definitely an extent to which part of that is just uh you know the old world being credentialist and there being all kinds of slow moving policies that favor old

stuff but there is definitely like a large component of this which is that like well actually you know in-person learning has all kinds of advantages right like it's uh Nitto this sort of like very disciplinary kind of um uh you know environments it's an environment where like everyone around you is um you know pursuing the same cause it's uh the sort of thing that uh you know if a journalist from Mars would come in and possibly describe as a cult and yet at the same time it's like super effective in a lot of context that actually teaching people right and you know like if you're having trouble with uh problem number 17 you could um you know go talk to your friend uh or go talk to your

professor and those options just like Exist by default right and so like that's one sort of proto-example in other good Proto example is uh Linux especially back in the good old days of the 90s like you know before it started uh like really yeah trying this kind of mainstream path and like you know get a good body to adopted and all of those things it's uh like Linux was intense and you needed to be intense to be a Linux person right but they had like these often in-person user groups in many cities and like if you have a problem and when you know if you're earnestly trying to become a Linux person like you could just go and like they'd actually help you figure things out right and so I think creating environments to like that like

environments and environments or things can be tested out like not just um you know separate individuals but like actually inside of a community and you could actually kind of you know run through the full workflow and uh make sure that like everything works right so like similar to how you know we used like zoo pass and Zoo pool right like it's not just a bunch of separate people that are like oh I can vote on things it's like you have an actual Community where people make polls people vote on polls people talk about the results of the polls things happen because of the results of the polls um if uh you know something spicy happens in the bowls people know about it and talk about it right and like you get this sort of much more holistic picture of uh you know like all of the

good things all the bad things all of the uh frustrating things as um you know I try to open up the app and you know it's a few months ago and it would take like 15 seconds to actually load the QR code and it wasn't fast enough for me to actually get like I had to wait beside the security guard to verify it and then I basically complained and then like you know like two uh two days later they're like oh yeah like you know we used the yeah like some some of the newer browser technology now and now things are much more quickly and it did right and so I think zoo pass is like the beginning like I would love to try out a whole bunch of other cool stuff like we need to make crypto payments come back right

like you remember back in 2013 there was a this big enthusiasm about Bitcoin payments like when I started my Bitcoin nomadding tour well when I was visiting the uh you know Northeastern us mainly New Hampshire because all of the fun Libertarians were there but like also Boston there were exactly two places that accepted Bitcoin there was a Thelonious monkfish and the river Veggie Galaxy I'm not sure whether these two still except Bitcoin or even still exist right but there's like you know like I would do you know it took pilgrimages to most of these places I took pilgrimage just a mini Bitcoin accepting restaurants in Berlin there was this thing called Bitcoin Keats where basic basically they convinced a whole bunch of restaurants in a small region of kreuzberg to accept to be acquainted at the same time and like we'd go on

pilgrimages to room 77 which was uh the most famous one of these um I think actually the founder right here room 77 yeah yeah right it's closed now right but I think was it even the one who started that whole thing he was yeah yeah and like the first Bitcoin there exactly crazy like that was like super cool right like I wanna and at the first mobile wallet right in Bitcoin was basically created by this guy because he yeah exactly because he wanted to pay with his phone in 277 yep yeah like so that stuff is like cool and I feel like now that we have layer twos and like cheap payments are again on the horizon and uh you know the The Benchmark I gave that the

internet ended up uh you know memorializing of uh you know that the internet of money should not cost more than five cents a transaction and I guess you know first people thought that it's a joke and you know now it's like Asia actually even back in 2020 um Loop ring made a payment specific CK roll-up where the transaction fee actually was lower than five cents right because if you make something payment specific you can make it really simple and you can only you can do a compression like use indices and you can make payments be only like 16 bytes total and like that's only a tiny amount of call data right so like you look I want to do like more of these cool things and like have communities to be able to do more of these cool things and like real Asia you know progress and

level up on this stuff like much faster and better did you see the gnosis pay announcement I did not so please tell me about it so basically it's a way to kind of connect the Visa card to a self-custodial wallet and basically um you Cassidy until you tap wherever Visa is accepted and it takes it right right out of your wallet um at that point and so busy it's it's kind of it's infrastructure so we're we're issuing um cards ourselves it's uh it's the nurses card but also um we are offering this as a service to other wallets so say one inch can offer one inch card zerion can offer zerion card metamask can offer metamask card and it's a way to kind of make your funds accessible um in in the larger word uh because I

mean crypto super safe referential right so basically because it's difficult to kind of on and off ramp and then kind of yeah just I didn't I didn't intend to share that here but you know they forgot the really cool part which is that if the payment terminal accepts notices pay the the payment is a crypto payment Yeah so basically what you can do is you can you can do like a native p2b transfer so it's uh yeah no no I think that's uh super cool um I don't know we we should do more of it let's maybe talk a little bit about the broader ecosystem sure as we before we wrap up here you know I I gave this talk history about uh interoperability between ethereum and other ecosystems and uh you know there were there were

some conversations also and some debates uh about you know layer twos versus multi-chain yeah where do you see the where do you see things going uh from the perspective of you know um the layer 2 thesis versus a you know app chain Cosmos like thesis and uh what are the biggest challenges to interoperability and uh need to be solved yeah I mean I think it's like good to sort of talk a bit separately about like chains and ecosystems right like uh there's uh like Bitcoin is an ecosystem that basically has like Bitcoin and like maybe liquid right and then ethereum is you know has ethereum and then everything which uh aspires to be in the

same security Zone as ethereum which you know would means that like it reverts if ethereum reverts or or it doesn't make progress until if your M finalizes and uh you know it would have to hard Fork if ethereum hard forks and all of those things um and then there's like other ecosystems and um you know it seems like Cosmos is trying to be an ecosystem and like do a lot of shared security and it feels to me like there's like I do expect consolidation between ecosystems right like I don't expect you know the yeah there to be like a large number of uh meaningful like totally independent things happening I yeah I mean I I do expect

um you know there to be a a lot of like chain interrupt happening within Cosmos just because like that's what mono Cosmos promotes as a wafer of uh like moving around Cosmos land and uh talking to things uh yeah I mean the main the main technical differences between these are I mean obviously one of them is just like security especially in more extreme circumstances like if a 51 attack does happen right it's like how much breaks um and then another one would um you know yeah like on the flip side be like okay well what happens if one of these things makes a governance decision and like does one make your government's

decision me it'll imply a Cascade of other governance decisions or does that mean that there needs to be a kind of some kind of multi-sig bridge that sort of relays the governess decision to other ecosystems and like these different properties have different trade-offs I guess right um and yeah like you have it's like you could have more adaptability or you could have more shared security or you could find ways to move a little bit more on the shared security Spectrum but then that ends up like sacrificing a little bit of adaptability I think it's uh I mean it's it's an interesting technical discussion um as though I also think that you know like only part of the problem is technical like the other part of the problem is uh just a yeah a

question of like which ecosystems are you know successfully able to survive and grow over time and I think one one interesting thing that I've been thinking about a lot and I trying to predict where things will happen is currently the interoperability discussion is very much happening I think at the lower protocol or in the state layer right and if you look at the way so you mentioned Linux earlier like the way interoperability happened between Mac OS windows and and Linux wasn't really at the application there it happened because of the web right we we created interoperability of applications at a higher layer of the stack and I wonder if this uh this Vision that we have for interoperability the IBC like you know uh State like state cross-chain state verification and

transport layer actually is what ends up happening or if we just end up having interoperability at the Smart contract right application I guess I've kind of I mean I did literally kind of make a similar point one and a half years ago right where I basically argued against Bridges and in favor of and against um you know the whole concept of assets home Done In One Security Zone being used in other security zones and in favor of like just uh like having dexas right and I think that's uh you know totally fine um yeah like in general I think it's uh like we don't want to you know create links that end up turning into something ugly if like something on one side or the other or the other goes badly right and in

like I think there's a lot of value that you could get from that kind of Opera interoperability right and the question is almost like well you know what do you even not get right like you could say yeah you know it's like okay fine you know every asset is homes in one ecosystem and if you want to use it in that ecosystem then like you like you need to go have an actual client of that ecosystem but that's fine like right like we yeah there's there's multi-chained wallets so there's a like as soon as wallets of any of these ecosystems become standardize and become libraries like someone's gonna wallet they just have a wallet that includes a copy of all of them right and then if you want to move to Once from one to the other you use the devs and if you want

to use a D5 thing they'll just be a copy of every important thing in each one of those ecosystems and that's fine right like that's uh in in a lot of ways I think it's a total wave okay a way to do things um but do you think that's the way that we see happen good question I think uh let's see what what do I think um I do think that like the ongoing instances of crazy hacks of uh Bridges or what my guess is that they're turning sewage amounts of people off from that concept right um and uh I mean obviously there could be Asia there could be different blocks once in the future and there could be a

Black Swan like on the you know Layer Two side for example right but it's uh like the uh I I definitely get the impression right now that like people are you know more skittish about holding their funds in complicated instructions than they were before just like because of uh you know how many of these weird 180 million dollar incidents we've seen but uh I guess we'll see it I'm totally with you that we need better Bridge infrastructure that goes without saying um but uh yeah I mean so basically we we're kind of close to the event of kind of like I mean we have trust minimized Bridges we would probably have like trustless Bridges bridges like um would that in your mind change things because basically if you look at kind of

the bridge exploits that we've seen in the last year and a half or so only a minority of them would have actually been prevented from the the um the networks actually being in there too right so basically those are mostly the compromise compromise Keys um kind of situations not the smart contract uh bugs yeah I mean bug risk is definitely and one of the issues and then I mean the other issue of course is like if you have a uh like even if you have a ZK Bridge like that's between or I guess like like a sonarka validity proof of consensus Bridge or whatever right like that still creates the possibility that there's like a a 51 attack on one of

these systems that actually leads to stealing coins right and like when you have a VC chain or whatever where like half the coins are literally controlled by four people then like they're the difference between that and a multi-sig becomes more of just kind of being nearly philosophical right so this is I mean like this sort of stuff is less of a problem between big ecosystems and it's more of a problem between small ecosystems right it's kind of like how uh like sometimes you know we like to trust that you know like oh if there's governance then like surely governance is like gonna at least be fine and then like a year ago there was that incident where there was like literally an 80 million dollar hack within a flash loan because somebody borrowed a bit of money and then used that to buy up half of a

governance token and then voted to give themselves a treasury and they made like a huge amount of profit right so yeah I guess uh you know we'll see and I'm glad that like that technology is being developed though of course we do need to you know also be realistic about timelines and like you know be realistic about like when we actually hand you know hand over the keys and um you know when we have the power to do upgrades and like all of these things but we'll see cool well thanks so much Vitaly for joining us today it's been really fantastic to talk with you again and in this you know special moment here in Paris with ECC I'm super excited to see

you know how ethereum is going to develop in the next few years so thanks so much yeah thank you guys too it's fun thank you yeah so that was interesting with vitalik what did you guys think I mean it's it's always interesting um interviewing metallic I I feel like I could have asked him questions for like another hour um but yeah very grateful that we get to have this time with him it's like yeah it's pretty cool that we get to sit down with him so yeah thanks for setting us up I didn't get to ask any questions I could also do another hour but yeah so for those who don't know this is Mr Joseph's right sir from the ethereum foundation and one time epicenter co-host twice if you

count the Defcon 6 rap yes okay and if you count this one it's the third yeah it was a charm but the weeks are very long you know so it's it's um these things have changed a lot but at the same time it's nice to see what uh uh you know what is surviving and what is thriving so if it gets harder to do these it means more people keep showing up but you started off the interview by saying there's more buildings there's more days yeah so it's uh it's it's nice to see that even in you know what the rest of the world considers the law we have this uh yeah it's a weird bear Market it's like I I remember like the 2015 bear Market when we went to Berlin and we were at

that second Bitcoin conference that they had in Berlin and like compared to the one that they had just before it was so dead and the enthusiasm was at zero and you know obviously there's been other Cycles since then but I just always go back at that that moment where like this conference room is just filled with a people that just were not enthusiastic about about what was going on versus what happened to you the year before and and this is not really that sort of in that sort of situation but this is a build a conference right so basically if you go to business conferences I think it's slightly different and also when you talk with the builders in depth a lot of them fear the pain that it's really difficult to raise right now so

basically I've had this time and time again this time well yeah I mean I I think sort of this situation is right that this is still though there was a lot of money in the space and of course people are motivated they keep building so even though it's bear market right there's a lot of what vitalik said right a lot of technical progress a lot of work that's being done and now of course I guess there is a question what is going to happen right because I think we saw you know this recently people showing like statistics about the funding from BC funds right which is down something like basically to almost nothing right so from uh like 95 or something right so basically the crypto VC funds are raising basically no money and then of course that will now

trigger like you know what you said right much harder fundraising environment and that of course you know with the lack that people have whatever maybe two years Runway so I do think that right if this bear Market does continue right another year and another two years then I think it could very well get super hard I mean if as a startup you have two years of Runway you're actually in a very comfortable situation I've actually spoken with lots of people who say look we're running out of money this quarter yeah of course yeah yeah of course I mean two years runways maybe after fundraising right but maybe how how long are you in and and of course not everyone has that situation either there was a you mentioned this 2015 sort of Bitcoin cycle it's very interesting to see what

is fluff um peer speculation versus what is a little bit more in the way of substance because when hype goes away but it was nothing but a speculative ecosystem then the rest of it also goes away and I think one of the key differences between that time 1516. and what we saw in let's say 1819 was even as the world moved on from this Ico era those conferences those research conferences started to get bigger and bigger and bigger and just like this uh it's interesting about this is that okay I come from this organization that doesn't organize this conference e France does ECC and East Denver is doing

the you know thing in Denver and Global does the global thing there's a venture that does Lisbon and uh apparently posted Prague and on and on and on and on and you know here we start to see these different verticals start to grow on their own the ZK folks and the Enterprise people and it's less fluff it's not you know there's an nft conference followed by a D5 thing and that's kind of it and this is where I think you can tell that there are enough in the way of planted seeds that there will be substance to follow it's just there's a there's a matter of patience to get there based on how far you figuratively fell because of a lot of some of the funny business that goes on when there's too much attention on the industry money included yeah I mean

patience is the key I think right now I mean like we're raising a fund and much like the crypto companies that are having a hard time raising we're you know we're hap we have some traction because we're in an ecosystem that you know obviously in Cosmos that has a lot of you know a lot of interest but it's it's not easy to raise but like counter that to like look at all these sponsors yeah you know but there's a there's a lot of um like this guy yeah yeah I mean all these people are paying and I mean we're organizing nebular Summit next week they're we we were able to fund the conference and like make a little bit of money like peop teams are reluctant to sponsor but they're still interested in sponsoring one thing that I think a lot of people hope is different

uh the next time that the world chooses to pay attention uh to this industry is that some of those resources stay with substance you know as we go around I've been telling a funny story for the last you know a day of the folks that do tend to find help are really neglectable ones that that you know we hope get that funding so maybe as things get quieter and the ones that are still able to bootstrap uh Builders themselves come from build land uh uh the things that can yeah not just survive but Thrive are also uh from a place of substance that's the hope at least we all want to see it

get to a point where the next time again the world pays attention we're not embarrassed after the fact that we can start to do some of the substantive things that we want to do good so lightning round favorite moments at ECC this year those moments where I wasn't running around for me days you had those moments no actually I think I want to say the Highlight because I didn't go to many side events and I didn't say very range Fox but of a few things that I did this week the most has been on the Eiffel Tower was very nice yeah and the uh no pay announcement was uh I think a really like it's great milestone you know that we have bridged the technological Gap you know but also there's probably like

lots of regulatory gaps that you guys have bridged in order to make that happen so yeah congratulations it's really really cool to see that well thank you okay I can't wait to get a card what about you too oh one thing it was nice little talk yesterday it's the first time doing a talk here which was sort of about orbit uh which was really nice uh yeah and then otherwise it's just uh yeah enjoyed quite a few talks uh I think the taxes overall were all great I think the content in general it seems to have been like you know really good and then yeah otherwise it's a lot of things around staking and um I think that's there's a lot going on

right I think it's bear Market or not right there's so much work to do yeah and you highlight you can't say your own event though no that's that's right um I actually really like the new venue setup so I I mean this building is always kind of where it's been at but basically the upstairs stories they were always like less uh less well laid out because there's no air conditioning and so on but I think now the venue around this around the corner with um the garden and basically where you can sit under the trees and um the crisis and and I love it I absolutely love it so I never grow up I always want to uh collect the most interesting swag so uh

this is point one but in actual conference programming thing I also wasn't able to get to many talks but one thing that I hadn't seen done before was a lightning debate room so those were I was I was in one of those yeah you just put super fun you know what's the lightning debate you take two people that uh put us in a room for a 15-minute period and then say you know what is a more decentralized ecosystem do Cosmos versus gnosis chain and uh then the crowd has to cheer after the fact for who won one of them clears out the next two come in and you debate the next thing I would like to see that done at another conference and we're going to do that at nebular I I take notes with epcon here so it's uh we like we need more spice I

mean like your panels one of the things about ECC is they don't you know they famously don't do panels and like Jerome has a policy but no panels but I think debates uh are are really good alternative to animals this is also one thing so basically I think panels they kind of they stand and fall with the host and whether they can kind of poke the attendees and kind of just the right right way to kind of make them kind of uh you know to pitch them against one another because you want to make them fight right so basically if everyone kind of gets to say their bit it's a bit boring so it's like hockey it's only interesting until the glove comes off absolutely until next year yeah next year at ECC seven

thanks so much for listening