Ep. 714 Why Solana Could Dominate Crypto (And What Ethereum Got Wrong) with SOL Strategies

[SPEAKER_00]: All right, everyone, welcome back to the Crypto 101 podcast. [SPEAKER_00]: We hope everyone is having a fantastic morning or evening because no matter where you're coming in from, you are certainly in the right place here today. [SPEAKER_00]: We have a very highly requested podcast, and in fact, a little bit of a familiar face over here. [SPEAKER_00]: He's been on before, he's a friend of the pod.

[SPEAKER_00]: Mr. Max Kaplan is the CTO of Solana Strategies or Soul Strategies, and he is the former director of engineering over at Kraken as well. [SPEAKER_00]: Max, it's good to have you back, man. [SPEAKER_00]: Excited to talk to you again. [SPEAKER_01]: Thank you so much for having me, Brandon. [SPEAKER_01]: Really appreciate it. [SPEAKER_01]: Excited to get into it.

[SPEAKER_00]: Yeah, we were catching up a little bit before this and we were just saying, man, it's been a little while about a year or so since we last got to talk. [SPEAKER_00]: And a lot of things have changed in the last year, some for the better, some for the worst.

[SPEAKER_00]: I'd say in terms of overall adoption and what's actually going on, the whole crypto industry, especially Solana has made some big steps in the right direction, however, there have been a few speed bumps along the way that have knocked us back in other areas. [SPEAKER_00]: So excited to talk to you about everything that's going on and what you all are still focused on doing over its soul strategies. [SPEAKER_00]: So just catch us up here.

[SPEAKER_00]: I guess before we even catch up and talk about what you've been up to since we last got to talk, just reintroduce what you're doing at soul strategies and what your role is for the people who probably aren't as familiar with with what the overall mission is. [SPEAKER_01]: Absolutely, um, so I'll keep it high level, right? [SPEAKER_01]: So soul strategies has really two different things that we're doing revenue models, right? [SPEAKER_01]: Well, first of all, we'll start here.

[SPEAKER_01]: Number one, we're a public company. [SPEAKER_01]: Okay, so we're listed on the CSE, the Canadian Securities Exchange, as well as Nasdaq, ticker right on my hat. [SPEAKER_01]: These are Disney's new hats. [SPEAKER_01]: So figure it figure this is cool to wear. [SPEAKER_01]: But, you know, so we're a public company, but we're really doing two things. [SPEAKER_01]: It's number one, we have the treasury side, and we have the validator side right now.

[SPEAKER_01]: And on the treasury side, it is, you know, we definitely always say we are not a dad. [SPEAKER_01]: So I want to make that very clear. [SPEAKER_01]: But, you know, we do believe in soul and salon of the network so much show that we have a salon of treasury strategy where we hold a significant portion of our own funds in soul, right? [SPEAKER_01]: So we're always looking to get more, we're looking to a crew more.

[SPEAKER_01]: We believe in soul and salon of the network and, you know, we're putting our money [SPEAKER_01]: On the other end, and kind of, you know, for the same reasons, we also run of four Solana, four proprietary Solana validators. [SPEAKER_01]: When I mean preparatory, my preparatory is that they're own validators that, you know, we're going out and other clients are delegating their stake with us, right?

[SPEAKER_01]: So we have four validators that are about, I in total, about 3.5 million sold, [SPEAKER_01]: delegated to our validators. [SPEAKER_01]: We also run white label validators as well for other clients. [SPEAKER_01]: So we have two right now. [SPEAKER_01]: One is for Solana Mobile. [SPEAKER_01]: Maybe people in your audience know the secret phone pretty cool. [SPEAKER_01]: If you haven't tried that out, definitely recommend to check that out.

[SPEAKER_01]: And on the other one is a Pengu by Pudju Penguins. [SPEAKER_01]: And the last thing which is just like very, very new that we launched [SPEAKER_01]: which for those who are familiar with liquid-staking, there's pros and cons to each, like I don't think native-staking is better or worse than liquid-staking, but one of the, one of the cons of native-staking is that on Solana at least, yeah, if you want to unstake, you have to wait up to a maximum of two days.

[SPEAKER_01]: Also, if you were, you know, you're a defy degener or whatever, you can't go and use that as collateral, your date of stake as collateral and defy. [SPEAKER_01]: With an LST, you can. [SPEAKER_01]: Also, on the other end note, to talk about the risk of LST is there are more risks and it's namely smart contract risk, right?

[SPEAKER_01]: You know, so really, we're just looking to meet clients where they're at in terms of, you know, on our staking side is, you know, whatever your risk tolerance is, you know, we want to offer you a fantastic product. [SPEAKER_01]: Um, you know, on the last, the, the last thing I'll say is this is that, you know, one of the things that's been new over the last year, like just for salon in general has been ETS launched, right, which is really, really, really cool.

[SPEAKER_01]: We're the soul-staking provider right now for VANIX Solana ETF, right? [SPEAKER_01]: Um, so that was a lot of work.

[SPEAKER_01]: Um, and actually a lot of it was kind of this like really boring work of like, you know, like obviously we had the validator stuff built out, but like, you know, if I were to throw out these terms to beginners, like, e-pocks, mev, you know, inflation rewards block rewards, like, none of those makes sense to like, you know, the average person, especially like suits and traffic right.

[SPEAKER_01]: We have to build this whole reporting layer that we talked about like on our learning schools to like, you know, map in, okay, this is this this is this type of revenue and you accrue this at this time, but like we can't use this epoch, you know, standard that's in crypto. [SPEAKER_01]: We have to map this back to like how these ETFs report. [SPEAKER_01]: You know, that's really been what we've been up to over the last couple months.

[SPEAKER_01]: Um, [SPEAKER_01]: You know, the recently last quarter has been launched in the LST and then you know, maybe the quarter before that was the ETF so a lot of exciting things were grown and it's fun to watch. [SPEAKER_00]: Yeah, I'd say that one of them. [SPEAKER_00]: I really like that you said this to begin with is that you're not a dad.

[SPEAKER_00]: You don't like to be called a dad because I think the best way to describe what you do is that you guys are big fans of the Solana ecosystem. [SPEAKER_00]: You want to support the Solana ecosystem. [SPEAKER_00]: You do it through your liquid-staking token. [SPEAKER_00]: You do it through all the other things that you talked about.

[SPEAKER_00]: And I think one of the best ways to prove that or validate that is to say, hey, because we're big fans of the Solana ecosystem, we're going to own a Solana because we are betting on the thing that we're so bullish about. [SPEAKER_00]: And I think that's, you know, arguably, and correct me from wrong here, but that's the way that I like to view what you all do. [SPEAKER_00]: It's just, hey, we're bullish on Solana, but we want to support all ends.

[SPEAKER_00]: We don't want to just buy the tokens and prop the token price up. [SPEAKER_00]: Because overall, you guys are bullish on Solana not just to make money, but you guys are bullish on it because of the ecosystem and what they're working towards, hence why you're, you know, working with vanac, you're working with ETFs, you're working as a validator, you're working in the defy side, you have your kind of hands.

[SPEAKER_00]: plugged into all these different areas because that is the first and foremost mission of soul strategies which is supporting Solana and it just so happens to be you know hey good way to do that sure it's all these other things but a really good way to do that or prove that you guys actually believe in it is also only a bunch of Solana which [SPEAKER_00]: I would say goes back to the core principles here. [SPEAKER_00]: Listen, we have people on from all lines.

[SPEAKER_00]: That's one of our favorite things about the podcast is that we get to have people who have worked on Bitcoin on and Bitcoin developers and some of the earliest ones. [SPEAKER_00]: We get to have on some of the leader-theorium developers. [SPEAKER_00]: We get to have all these other projects and all these other layer ones and layer 2s. [SPEAKER_00]: But, you know, we like it all over here, right? [SPEAKER_00]: Yeah. [SPEAKER_00]: We're huge fans of Solana.

[SPEAKER_00]: Do you know the podcast to welcome? [SPEAKER_00]: Um, you know, hopefully that's a good thing for all you listeners out there, but truth be told we are. [SPEAKER_00]: Uh, and so a lot has changed in the last year or so. [SPEAKER_00]: Maybe I've been changed as the right word, but a lot's going on, right? [SPEAKER_00]: So I guess just catches up the speed a little bit more. [SPEAKER_00]: You talked about some of the new upgrades and products and all that.

[SPEAKER_00]: Um, maybe what has changed from your perspective has the way that you all have tried to do business or any of that changed.

[SPEAKER_01]: Um, [SPEAKER_01]: a little bit you know I would say this that like you know I think you're a pretty spot on in terms of like what our bet is in terms of you know like we're you know like I guess I'll say this but you know like we we want to be like a tech company in Solana what I mean by that is that you know like a lot of people they can flake soul the token and like Solana the network has the same thing and you know they're like very strongly correlated.

[SPEAKER_01]: But, you know, if you just look at, if you just zoom out and you look at all the stuff that came out like over the last year, I mean, you have the head of the SEC talking about right now that all of finance is going to be tokenized in two years right and it's fair to say something like, okay, if that happens and it happens on Solana.

[SPEAKER_01]: you know the price of soul will go up right but also too it's that like we want to be there and help like all the finance moved us along as well and like the best way to do that is to be hands on building stuff making the network better right whether it's like just raw raw infrastructure like that's my background like i'm a dev up sky by trade right um you know running [SPEAKER_01]: You know, and then also, but like building products and services and top of that, right?

[SPEAKER_01]: So like our belief in my strong belief is that, you know, finance will move on shame, right? [SPEAKER_01]: I definitely think that Solana will have like a very, very big part of that. [SPEAKER_01]: And we're looking to, you know, if that is the case in our bed is correct, which I think it is, you know, we're going to be rewarded for that as a public company. [SPEAKER_01]: right, and we're really trying to, you know, make this big bet there.

[SPEAKER_01]: So, you know, to come back and answer your question, like, has anything changed? [SPEAKER_01]: You know, I think we're we're actually focusing more and more and more on how can we get deeper and deeper and deeper and green into

[SPEAKER_01]: the network and products and services that you know you're going to see come out over the next couple of months that like we're working really hard towards and then I think just like one other thing that I think is like kind of unrelated but it's kind of interesting it's just like over the past few months like especially since like November, AI has just made things just like so much easier to build and you know we've thick really focused a lot on like

[SPEAKER_01]: how can we optimize like not only our tech but like all of our workflows as well you know because like we are a public company and you know like reporting on a public company just sucks right I mean it just it's not fun a lot of work is a lot of work it's a lot of work and I take zero credit for it because my background is certainly not a CFO and you know our our CFO's amazing I love a guy but you know also just like how can we make our business more efficient as well

[SPEAKER_01]: Um, and I just never had more fun building in my entire career. [SPEAKER_01]: It's just such a cool, cool time. [SPEAKER_00]: Well, you know, I think one of the big, I don't want to say new ideas. [SPEAKER_00]: One of the big pushes that I've seen from your end is saying that you believe that revenue will be a bigger driver for protocols and crypto-related companies moving forward with [SPEAKER_00]: And that has been something I completely agree with.

[SPEAKER_00]: I've been saying the same thing over here, where you start having a lot of these old coin projects that have been around for years, or you start having all these just bring crypto companies and projects. [SPEAKER_00]: And I think now we're getting to the point where people said, hey, we're kind of... [SPEAKER_00]: exiting out of like the early baby stages, and people are starting to say, okay, you know, where's the working product? [SPEAKER_00]: Where's the working service?

[SPEAKER_00]: Where's the money that's being made? [SPEAKER_00]: And people are starting to look for that. [SPEAKER_00]: And, you know, I agree. [SPEAKER_00]: I think that that will be a [SPEAKER_00]: huge drive removing forward, but walk us through kind of your thought process and what you're expecting for the crypto industry because people hear that.

[SPEAKER_00]: And I think prior to maybe the last year or so, there really wasn't, I don't want to see any emphasis, but very minimal emphasis on how much revenue are you actually driving as a protocol or a project? [SPEAKER_00]: Whereas again, I think that's going to be increasingly more common to see that as a basic expectation.

[SPEAKER_01]: Absolutely great great fantastic question and before I answer that like I'll separate I want to separate it out between like tokens which I mean like non layer one assets and then I want to separate it out with like layer ones on so to talk about tokens right there's been so much to bait since like 2017 [SPEAKER_01]: on like the proper way to do a token like back in, you know, the ICO days.

[SPEAKER_01]: And we've seen like incredibly interesting projects that have amazing products that you have launched a token. [SPEAKER_01]: And almost all of them, like the chart looks like that, right? [SPEAKER_01]: Just like, you know, the wrong way, that, you know, like that, the wrong way of like what everyone wants, right? [SPEAKER_01]: And there's been so much talk about like the proper way to do a token, right?

[SPEAKER_01]: And you know, there's like one angle on the lawn shy, then there's like another angle on like how you keep that value up.

[SPEAKER_01]: But, you know, potentially a controversial statement, like the way I kind of look at this is like there's like a right curve and a left curve way of looking at this and like, you know, on the, you know, like I tend to think about it more like this, like I don't think tokens are that much [SPEAKER_01]: If the token itself doesn't accrue revenue, then what is, what are investors actually buying? [SPEAKER_01]: You know, you're buying just like some form of hype, right?

[SPEAKER_01]: You know, and like, listen, if you want to play that game, and you want to speculate, like, you know, I'm not here to tell you what you should and should and do with your money. [SPEAKER_01]: I'm not going to do that, right? [SPEAKER_01]: But, you know, that's in choice, like, you know, you as the listener have to make. [SPEAKER_01]: But, you know, these products, [SPEAKER_01]: The tokens right now don't really represent true equity ownership in the company.

[SPEAKER_01]: And we have to get more and more towards that. [SPEAKER_01]: And that there's really interesting things that are coming out. [SPEAKER_01]: I'm a big fan of what MetaDow is doing, right?

[SPEAKER_01]: I think there's like, [SPEAKER_01]: that like on that end I just think we have to get closer to like we've had this instrument that has worked for what hundred like a hundred years which is like equities right and that's like a proven model and it works and it really comes down to you know you have an ownership in the actual company you have ownership rights to the revenue like that's that's the right model.

[SPEAKER_01]: Um, unlike the layer one assets, this is like a different argument, right? [SPEAKER_01]: It's that like my belief and I, you know, there's a, there's a strong, there's like a lot of people that believe this. [SPEAKER_01]: My belief is that layer one cell blocks base, right?

[SPEAKER_01]: That's what they do and, um, [SPEAKER_01]: Any time they're selling block space and what I mean by that is that when it was someone to submitting a transaction that is a user going and putting a fee saying hey I'm willing to spend this much whatever that fee is to get my transaction put into a block to do whatever it might be sending stable coins it might be buying a meme coin it might be buying an RWA whatever right the

[SPEAKER_01]: If a layer one is not selling block space, meaning it's not being used, then the value of that layer one is very, very low. [SPEAKER_01]: In my opinion, regardless of what coin market cap says, right? [SPEAKER_01]: You know, the, the things will only stay valuable. [SPEAKER_01]: So long as they're actually useful and so long as people are paying fees for them.

[SPEAKER_01]: And [SPEAKER_01]: where ones should be judged based upon the fees that users are willing to pay it like when I wrote this out and like write curve versus left curve like on the right curve like sometimes you add these people just like overthinking this so much like I do think that they have points right but like it has to come down to [SPEAKER_01]: Like, something is only worth as much as someone is willing to pay for it.

[SPEAKER_01]: And on the layer one side, if people aren't willing to spend ease to use the chain, it's like, you know, if they're not willing to spend at all its worthless, right? [SPEAKER_01]: So that's kind of my mental model for how things are going out. [SPEAKER_01]: Then industry is moving more towards that, which like, I'm very, very excited about. [SPEAKER_01]: And I think we just have to move more towards that.

[SPEAKER_00]: Yeah, I had a long conversation a few weeks back with a buddy who is a developer on Salana, worked on it for years now, built his own project. [SPEAKER_00]: And we had a long conversation about this about what inherently gives a blockchain as a layer one value, what keeps it sustainable, and builds value, because it's built different from an equity. [SPEAKER_00]: With an equity, it's different in you of earnings calls and you're getting ownership of the company

[SPEAKER_00]: all of that stuff, right? [SPEAKER_00]: And then obviously the more money they make, the more, you know, you make and the more price goes up. [SPEAKER_00]: But it's a bit different with Layer 1s and I think it's even more so different with individual projects.

[SPEAKER_00]: And so we have this long conversation about the importance of revenue and how do you pass over actual, [SPEAKER_00]: progress, because Solana can be wildly successful, it can grow its market share, it can grow its activity. [SPEAKER_00]: But while that should be reflected in price, it's not forcefully reflected in price. [SPEAKER_00]: And again, so we had this long experience, which is why I think this conversation is so important.

[SPEAKER_00]: But we've seen a lot of comments as well saying, hey, guys, well, it should be the case. [SPEAKER_00]: There's also all these different competitors, right? [SPEAKER_00]: There's people saying you should be doing this on Ethereum. [SPEAKER_00]: You should be doing this on Solana. [SPEAKER_00]: You should be doing this on [SPEAKER_00]: into the list goes on, right? [SPEAKER_00]: There's a million options now.

[SPEAKER_00]: You know, for the people out there, let's play a little bit of devil's advocate here, why should or why do you believe that Solana should be one of the big winners here? [SPEAKER_00]: You know, what we're actually big theorists and all prep is this by saying, you know, we believe that more than one blockchain can survive, right? [SPEAKER_00]: We don't think it's going to be a one winner takes all at least not over here on our team.

[SPEAKER_00]: But you know, why do you think that Solana is in like prime position to be one of the biggest beneficiaries over some of these other competitors? [SPEAKER_01]: Yeah, fantastic question and I do agree it's it's I don't think it's a winner take all I think it's a winner takes most I think there's going to be a few that that stick around my view is this is that, you know, if you go back like all the way to like even the the Bitcoin block size wars right.

[SPEAKER_01]: There was so much debate about Fee Market, and what I mean by that was that, you know, there was a time where, you know, on Bitcoin, you need to spend $100 to submit a transaction, right? [SPEAKER_01]: Like, when you think about like all the people that you are pricing out of the market, meaning you're pricing out people from actually using that blockchain, like,

[SPEAKER_01]: Solana, the thing that interested me with Solana so much, especially like in the early days back in the days was that even Ethereum went down this route of saying that like you can make an argument that like the higher the fees are the like the better right because okay cool people are willing to spend this much money that's also that was like the argument that like Bitcoin made in the early days and ethereum I think that's completely wrong and that's like the Solana stands and Solana went the complete other way.

[SPEAKER_01]: And said, how do we like we're going to make fees as cheap as possible through scaling, which is like the key point why I think salon is going to win. [SPEAKER_01]: And if you make cheap fees as cheap as possible, more people are going to use the chain so that the aggregate sum of the fees is more than the aggregate sum of like these like people like fewer people submitting fee submitting transactions on chain that are paying a lot. [SPEAKER_01]: Right?

[SPEAKER_01]: Solana is more a model of let's have many, many people submit transactions on shame that are paying very little. [SPEAKER_01]: That is the reason I think Solana is going to win. [SPEAKER_01]: Low fees is what is going to take. [SPEAKER_01]: It's what it's going to take for finance to move on shame. [SPEAKER_01]: And if we think about just where we're at today, like so little of finance is on shame right now. [SPEAKER_01]: and be nowhere close to like what Tradfy is doing, right?

[SPEAKER_01]: And to try to maximize on fees right now is completely missing the forest for the trees. [SPEAKER_01]: Solana has proven itself as the only layer one that can actually scale and support volume. [SPEAKER_01]: And just let me put some of my card data on this. [SPEAKER_01]: But we saw this, like I don't want to talk about meme coins here, but you could replace meme coins of any asset for this analogy.

[SPEAKER_01]: Solonid dexes did double the volume of both Kraken and Coinbase combined the two biggest US students is out there, right?

[SPEAKER_01]: You can't say the same for any layer one that did that much volume and Solonid has proven itself through and through that it is the only layer one that can support that. [SPEAKER_01]: And the last thing I'll say is this is that like I think there's two main use cases where blockchain is going to win, but I think most of the value is going to come from the one about to talk about, which is trade it, right, rating is where most of the value is going to come from.

[SPEAKER_01]: I think it's for so many reasons. [SPEAKER_01]: I think it's for like 24, 7 access. [SPEAKER_01]: I think it's for cheaper access. [SPEAKER_01]: I think it's for like people who can't buy certain products like do you want to buy [SPEAKER_01]: You know, it's very hard to do so. [SPEAKER_01]: Right? [SPEAKER_01]: Um, so in order to be in order to capture most of the value from trading, you need to be extremely, extremely fast.

[SPEAKER_01]: If there was block, uh, if there was block times or 12 seconds, okay? [SPEAKER_01]: Solana's block times are 400 milliseconds, where we'll be down to sub 100, very, very soon. [SPEAKER_01]: You just can't compete with that, right? [SPEAKER_01]: Um, so that's why I think [SPEAKER_00]: Do you find it, I don't want to say like intimidating, but it does seem like Ethereum is getting a little bit more competitive.

[SPEAKER_00]: One of the stats that I saw and we've talked about is that from the prior cycle, looking around the 2021 era, Ethereum has been able to double its all-time high in previous cycle transactions while getting gas fees pretty consistently under one cent. [SPEAKER_00]: Now, it's still not as fast to your point. [SPEAKER_00]: It's still, you know, so I would say significantly slower than Solana.

[SPEAKER_00]: And Solana is still cheaper from a gas standpoint, so you have that going, but you do see a theorem, at least the main chain scaling pretty quickly. [SPEAKER_00]: What are your thoughts on that? [SPEAKER_01]: Yeah, great question again. [SPEAKER_01]: And I do think Ethereum is now moving in the right direction. [SPEAKER_01]: And I think the Ethereum L1 is going to continue to scale. [SPEAKER_01]: And I think a lot of their problems like will be solved.

[SPEAKER_01]: But it's a question for me of is it too late? [SPEAKER_01]: And there's like there's two things I want to like really talk about theirs is like the first one is like a little more obvious.

[SPEAKER_01]: It's that the Ethereum scaling roadmap [SPEAKER_01]: is like very law right and like to their credit like they're building some of the coolest technology that is out there in zero knowledge proofs and you know like there's a saying in cryptography that a lot of people say that I don't I don't necessarily agree with but there's a saying in blockchain that if you can scale with cryptography you should

[SPEAKER_01]: I mean, if you're in the strings to do that, but you're talking like a five-year roadmap, okay? [SPEAKER_01]: Is it going to be too little, too late? [SPEAKER_01]: I don't know, I think it might be. [SPEAKER_01]: But the second thing is the most important to me, is that, in trading, not only is it important to be fast, but you need to be liquid, right? [SPEAKER_01]: You need to have liquidity.

[SPEAKER_01]: And, you know, if you have something that's really fast, but with no liquidity, in trading, it's worthless. [SPEAKER_01]: Now, the problem that Ethereum faces is that for so long, they went down this layer two road map. [SPEAKER_01]: And you know, like, I think that was like, okay, but, you know, if you really think about layer two, they're like, I think it's objective that their parasitic to the layer one.

[SPEAKER_01]: You know, like, you know, these, I don't know how much we want to get into it, but, you know, like the analogy that I like to make is that, you know, like, in the early days of centralized exchanges, they were going down all the time, right? [SPEAKER_01]: You know, I weren't to crack in, like, I used to say, my job was to crack and went down. [SPEAKER_01]: It was my fault.

[SPEAKER_01]: And there's a lot of times where, like, you know, like, listen, we went down and I had the battle scars to prove it. [SPEAKER_01]: But like, you know, imagine, I'm trying to think of myself, like the equivalent of what Ethereum's in with player choose was like, you know, if I went to the CEO Kraken, I said, listen, we can't scale anymore. [SPEAKER_01]: We just got to ship out our order flow over to Coinbase, you know, because we just can't do it.

[SPEAKER_01]: Like, I would be fired instantly, you know, like it and rightfully so. [SPEAKER_01]: And right now, Ethereum has this problem where they have liquidity fragmented across other layer, too. [SPEAKER_01]: They're not composable in the sense that you can't have like, you know, if you have $100 worth of USDC in some liquidity pool, that can't be used on arbitrum, it in base, that can't be used on arbitrum, that can't be used on any other layer, too.

[SPEAKER_01]: I can't be used on Ethereum as well, and now Ethereum, like, you know, these layer two's, you know, you're talking about Coin Days, who, you know, has, you know, is a public company where they're, you know, incentivized to increase revenue, right? [SPEAKER_01]: You know, so Coin Days has base, they're not going to be giving that up anytime soon. [SPEAKER_01]: You have Robin who are coming out with their own layer two, right?

[SPEAKER_01]: They're not going to be willing to give up that revenue. [SPEAKER_01]: So, I don't know, I don't think they're going to be able to, um, to get back to liquidity.

[SPEAKER_00]: Well, let's stir the pot there, because myself and Tiibo, who's in the background of the podcast, we've talked about this in depth, and so some of the other analysts over here, and my stance on this is for people who don't know, Vitalik came out, you know, creator of Ethereum, and he basically came out and said, hey, L2s have not lived up to what I've expected them to be.

[SPEAKER_00]: They haven't fulfilled the role the way that I wanted them to, and he could see Ethereum moving [SPEAKER_00]: starting this dear clear of layer two's or thinking of that as a as a potential possibility. [SPEAKER_00]: And so that's what we're referencing here in this conversation. [SPEAKER_00]: I love it's a big long post, right? [SPEAKER_00]: I'm oversimplifying it. [SPEAKER_00]: You should go read it for yourselves, everyone.

[SPEAKER_00]: But I actually agree with that post because he's right. [SPEAKER_00]: Some of these L2's at certain points are more expensive than the the base chain now, which is crazy. [SPEAKER_00]: And then you have the transactions getting faster. [SPEAKER_00]: You have more features. [SPEAKER_00]: You have it getting more complex. [SPEAKER_00]: And a lot of these tokens have done of kind of just becomes somewhat complacent.

[SPEAKER_00]: They've seen really large unlock events, people have been able to sell off those, those tokens for those layer two's of crashed, and it's created kind of a handful of issues. [SPEAKER_00]: My stance on this is that I largely agree with the Vitalix stance. [SPEAKER_00]: My caveat is that I think that there is a place for purpose-driven L2s. [SPEAKER_00]: I think general purpose L2s are, I think he's spot on with. [SPEAKER_00]: I agree with everything, almost everything that he said.

[SPEAKER_00]: I think general purpose L2s should it probably be better off giving that liquidity back to the main chain and giving all of those the transactions and everything and doing it on main chain. [SPEAKER_00]: I think very purpose driven L2s are layer 2s that function with a hyper specific purpose in mind. [SPEAKER_00]: I think that makes sense to me because it's companies saying, hey, we don't want to be on the main chain.

[SPEAKER_00]: We do need something that's a little bit more fine tuned to exactly what we need. [SPEAKER_00]: And I think that will have a place and it should, you know, continue to have a place. [SPEAKER_00]: And so that's my stance on this. [SPEAKER_00]: I think like Robin Hood saying, hey, we have this gigantic exchange.

[SPEAKER_00]: We have all this capital, millions and millions of users, same thing with Coinbase, you could argue that as well and say for for those, maybe specific use cases and other ones, you could argue that it makes sense for them to have something that's hyper tuned to exactly what they need. [SPEAKER_00]: But, [SPEAKER_01]: Yeah, I completely agree with you, actually.

[SPEAKER_01]: I think that generic Lair 2s make no sense, but it's not only that they make no sense, it's that they're parasitic, right? [SPEAKER_01]: It's that ethereum. [SPEAKER_01]: It was a ship in volume where it was telling people, bridge your funds off the ethereum layer one and move them to a layer two, right? [SPEAKER_01]: So you had base get like, you know, this huge inflow of liquidity, right? [SPEAKER_01]: Um, I don't see that look like I don't see Coinbase sand.

[SPEAKER_01]: Hey, yeah, awesome. [SPEAKER_01]: You know, like work completely aligned with Ethereum. [SPEAKER_01]: We're going to shut down base. [SPEAKER_01]: Everyone move your funds back to the layer one. [SPEAKER_01]: Even if that was like something that they could do. [SPEAKER_01]: I don't see that happening here. [SPEAKER_01]: Point though, there are places where layer to make sense. [SPEAKER_01]: And I think you, you nailed it.

[SPEAKER_01]: It's that like, you know, if we're talking about curb stecks or something, that like this is like extremely specific sequencing and application logic. [SPEAKER_01]: I think that makes sense. [SPEAKER_01]: I think if you're doing something in stable coins, we're like, you want to have on and off for ramps built into it, great, use a layer two, right? [SPEAKER_01]: I think those are fine. [SPEAKER_01]: And I think those are actually value ads.

[SPEAKER_01]: I just don't, I disagree with you, that I don't think generic layer twos make sense. [SPEAKER_01]: And I think they're so much liquidity locked up in those. [SPEAKER_01]: I don't know if they're going to be able to get it back.

[SPEAKER_00]: Well, I've seen you talk a little bit more about this and he said there's there's a reason for why you're primarily potentially bearish on both Bitcoin and for Ethereum and you said for Bitcoin, you're nervous about the quantum threat and for Ethereum, you're nervous about the L2 civil war as I think what you put it as is that like what we're kind of referencing here. [SPEAKER_01]: Yeah, definitely like I am on the ethereum side. [SPEAKER_01]: Yes, I think and I want to be clear.

[SPEAKER_01]: I think ethereum is moving in the right direction and like I don't want Ethereum to fail. [SPEAKER_01]: Right. [SPEAKER_01]: Like I think if Ethereum failed, it would be terrible for the industry, including Solana. [SPEAKER_01]: right? [SPEAKER_01]: It's just that like if you just look at how much liquidity is trapped up in these Lairtos and how big some of these companies are, where they're like Coinbase is a public company.

[SPEAKER_01]: They're incentivized and they have to, they have a mandate to increase their revenue, right? [SPEAKER_01]: Like Ethereum is just, you know, like, listen, I think there's great people at Coinbase.

[SPEAKER_01]: I'm not talking about anyone individually here, but if you're talking about Coinbase the company, [SPEAKER_01]: like they're incentivized to maximize their own revenue and profit and they're going to do everything that they can to keep that liquidity inside of base and you know now Ethereum has to fight against Coinbase who they shipped their customers off to right and it was that that was like my analogy of like when I was back at Crack and like

[SPEAKER_01]: You know, if I told someone that we need to ship our order flow over to Coinbase or, you know, insert any other competitor in there, I would have been fired rightfully so and, you know, if someone in the audience is like, you know, listening and they don't work in crypto, you know, just, but like you can insert that as well. [SPEAKER_01]: Like, think about, oh, you can't serve your customers. [SPEAKER_01]: Let me go and ship them off to a competitor and make no sense.

[SPEAKER_01]: Crypto is no different. [SPEAKER_01]: Right. [SPEAKER_01]: On the Bitcoin side, I think there's kind of two things that I'm really worried about. [SPEAKER_01]: They're both long-term just to be fair. [SPEAKER_01]: So I think that I'm talking like 10, 20 years down the line. [SPEAKER_01]: I think Bitcoin might go to a million dollars. [SPEAKER_01]: I'm not saying that. [SPEAKER_01]: I'm just saying, well, it's a prize me.

[SPEAKER_01]: But the two things that make me bearish on Bitcoin long-term is number one is the quantum threat. [SPEAKER_01]: I think that Bitcoin potentially, in no particular order, I want to add. [SPEAKER_01]: Bitcoin has like the beauty of Bitcoin is it's so decentralized, but also the con of that is it's so hard to get anything done in that ecosystem. [SPEAKER_01]: And I used to be like deep in Bitcoin.

[SPEAKER_01]: I was like at one point, I was one of the the I was the top contributor outside of lightning labs to the light the first lightning wallet. [SPEAKER_01]: So I lived in this space for a while. [SPEAKER_01]: But it's become so ossified now that it's like so hard to do anything. [SPEAKER_01]: There's people out there like huge institutions, you know, Bitcoin is a store of value, like that's the, you know, that's the narrative.

[SPEAKER_01]: there's institutions out there that are worried like I don't want to put money in a Bitcoin if like you know they're not going to fix the risks that come with quance of computing and you know if you look at the response from Bitcoin developers it's like oh this is 10 years away blah blah blah like humans always have a problem doing with exponentials it's not the way our brains work and like even if you just look at AI you know there's like you know mark Cuban like famously kind of went out and said oh we're like 100 years away from you know it's like four years ago.

[SPEAKER_01]: saying like, oh, like, well, like a hundred years away from, you know, like AI, like replacing people's jobs, look how quickly like that's happening, right? [SPEAKER_01]: I think quantum's going to come much faster. [SPEAKER_01]: The second thing is one of the things I'm really worried about Bitcoin is a kind of, like, it kind of ties into what we talked about with revenue.

[SPEAKER_01]: Is if you look at the Bitcoin network in terms of how value gets back to miners, [SPEAKER_01]: only 1% of what miners revenue actually comes from blockfeet, like block awards, right? [SPEAKER_01]: Which is people actually submitting transactions on chain. [SPEAKER_01]: The 99% of it comes from inflation. [SPEAKER_01]: which is, you know, Bitcoin has always talked about is this just, it's a deflationary asset and that's true, depending upon your time horizon.

[SPEAKER_01]: But like if you look at how much Bitcoin is inflating month over month, you know, this would be for a crash, but like a one point it was like a billion dollars or something, and you know, like a month. [SPEAKER_01]: And, you know, if inflation goes like the, you know, Bitcoin's inflation is going to go down and that's a good thing, right? [SPEAKER_01]: But Bitcoin will die if people don't use the Bitcoin blockchain.

[SPEAKER_01]: Like, you know, when inflation goes to zero, miners will have to shut down because they can't go and pay their electricity bills, which they need to. [SPEAKER_01]: And, you know, Bitcoin is a beautiful proof of work protocol, but miners have to be incentivized around the chain. [SPEAKER_01]: If people aren't using the chain, which they're not, and like you have [SPEAKER_01]: You know, that like, you know, centralized Bitcoin, so you don't have to use the chain.

[SPEAKER_01]: There's no way it survives there's a zero chance. [SPEAKER_01]: So those are my worries [SPEAKER_00]: Yeah, no, I think it's good to hear both sides. [SPEAKER_00]: You know, over here, again, I want to reiterate this, you know, we're big fans of Bitcoin, Ethereum, Solana, and many other projects. [SPEAKER_00]: We're fans of all of crypto. [SPEAKER_00]: And I think it's so important because we want to look at everything through both lens.

[SPEAKER_00]: I think it'd be stupid if all we did was have guests on, who all they did was glazed crypto, their favorite project, they glazed Bitcoin, glazed Ethereum, Glacilana, and they said everything's going to the moon. [SPEAKER_00]: Like it'd be such a silly podcast if that was the only point.

[SPEAKER_00]: to have hard conversations, important conversations, good conversations, but also let's have some constructive criticism, and let's talk about some of these harder to talk about things, some potentially negative catalysts, and let's actually talk about them, and then you all the listeners get to hear both sides from leaders in the industries, and then you get to make your own decisions.

[SPEAKER_00]: And so, [SPEAKER_00]: Again, I think it's important that we have these conversations and you know we've gone back and forth about maybe some of the the cons that you are seeing and maybe some of the ones that I felt with the theory and but I think it comes from a place of love at least on my end because you know truth be told I own probably about an equal amount of both Ethereum and Solana I'm betting on both of them.

[SPEAKER_00]: And because of that, I want to see both of them survive. [SPEAKER_00]: So what we were saying earlier might have sounded a little bit harsh, but it's because we want what's best for the industry and to your point, we don't want a theorem to go away. [SPEAKER_00]: We don't want Bitcoin to go away.

[SPEAKER_00]: We bring this up because we want to actually see the best possible changes because if either one of those disappear, I think it's pretty safe to say that crypto as a whole is going to be in a little bit of trouble, not a little bit. [SPEAKER_00]: It's going to be in a lot of trouble.

[SPEAKER_00]: Um, so again, I think it's important to have these harder, tougher conversations because it comes from a place of us wanting to see the industry thrive and succeed and the most impactful valuable way possible, which is is really where it all comes from, but [SPEAKER_00]: I want to transition us back to Solana here, right? [SPEAKER_00]: I've played a little bit of Deadpool's advocate. [SPEAKER_00]: We've stirred the pot.

[SPEAKER_00]: We probably have people already type in some comments about, you know, their opinions, but let's transition back to Solana here, because there's a lot of good stuff to come, right? [SPEAKER_00]: The future, I think, for all of Crip those packed to the lot of great stuff. [SPEAKER_00]: But what are you most excited about in the coming year? [SPEAKER_01]: Yeah. [SPEAKER_01]: Great, great question. [SPEAKER_01]: Um, I think I have a technical answer and a non-technical answer.

[SPEAKER_01]: I think the on the technical side, and I won't go too deep into it, there's a new upgrade coming, which is called Alpine Glow. [SPEAKER_01]: And just think of Alpine Glow as something that's going to make Solana, it could be up to like 4x faster, right? [SPEAKER_01]: You know, which is, it's going to reduce the block time down to, you know, could be around a hundred milliseconds, could be less, could be more,

[SPEAKER_01]: But you know around that I think is pretty safe and you know when you get to those levels like the the smaller the block times are the more interesting Interesting things that you can do and the better trading experience the better the trading experience becomes that's what I'm very excited about on the technical side on the non technical side [SPEAKER_01]: The thing I'm most excited about is some of these really cool unique assets that are coming out.

[SPEAKER_01]: And there's like a few angles I could take from it. [SPEAKER_01]: But one of the ones I find extremely interesting is RWA's, right? [SPEAKER_01]: So, you know, like there's like two good examples that I like to bring up. [SPEAKER_01]: Number one is prime, right? [SPEAKER_01]: Which in prime is a tokenized fund. [SPEAKER_01]: It's basically tokenized credit that gives access to helox in the US. [SPEAKER_01]: So prime is there's a company behind prime, it's two.

[SPEAKER_01]: One of them is prime. [SPEAKER_01]: It's sorry excuse me, it's figure, which is a public company that's NASDAQ listed. [SPEAKER_01]: right? [SPEAKER_01]: If you wanted to go and get exposure to, you know, yield on helox, how can you do that today? [SPEAKER_01]: Right? [SPEAKER_01]: You can't really, right? [SPEAKER_01]: I mean, you could go and buy stock and whatever, right? [SPEAKER_01]: And hope that, like, you know, the value of cruise there.

[SPEAKER_01]: But, you know, that's, um, it's very difficult to do. [SPEAKER_01]: The other one is another company called Honra, which is reinsurance, which if you're not familiar with reinsurance, it's [SPEAKER_01]: insurance companies buying insurance from other insurance companies, right? [SPEAKER_01]: So there's insurance companies that will issue insurance to other insurance companies.

[SPEAKER_01]: So some of the yields on these things are like, you know, I mean, like, if you just look at the actual policies and from the issue is like 40 percent. [SPEAKER_01]: There's no way to get access to those markets today without these tokenized funds. [SPEAKER_01]: These, like, that is beautiful in my opinion, because it gives investors exposure to things that, you know, typically only like the top 1% of people by net worth could get access to.

[SPEAKER_01]: And also, like, you know, the more obvious answer is tokenized stocks, right, you know, I think goes a really cool and also like all of the native at all of like other layer one assets that are also coming to Solano right, so like, you know, there's XRP on Solano there's hype on Solano there is, you know, like Bitcoin on Solano right, like, [SPEAKER_01]: that is really, really cool.

[SPEAKER_01]: And I think the better the asset quality on the network, the more activity, we're going to see regardless of the network. [SPEAKER_01]: But on Solana, I've been, you know, I was talking to one of my buddies, sorry, I was just talking to one of my buddies in Ethereum. [SPEAKER_01]: And, you know, the other day he was like, you know, like, some of the assets on Solana are so cool. [SPEAKER_01]: Like, I agree.

[SPEAKER_01]: And like, I don't know, for whatever reasons Solana just had so many cool assets. [SPEAKER_00]: Well, I think, you know, I would agree with you and Solana is growing and you've seen some big institutional partnerships. [SPEAKER_00]: People still look at Ethereum and I think Ethereum to this state still has a higher level of maybe institutional adoption.

[SPEAKER_00]: And this is the way that I look at it is that I think Ethereum might be seeing a higher level of institutional adoption, but it would seem that Solana seeing a higher level of retail adoption. [SPEAKER_00]: Yeah. [SPEAKER_00]: And you see a lot of retail users, traders, whatever it may be, they really do enjoy Solana for a lot of the reasons that you mentioned. [SPEAKER_00]: It's cheap, it's fast, it's efficient, it does the job.

[SPEAKER_00]: What will it take to maybe get some more? [SPEAKER_00]: Because again, we've seen it growing, you've had some big names already enter in. [SPEAKER_00]: But what will it take for you seeing a world where Solana sees more [SPEAKER_00]: I would assume your answer to this is, I'm going to say, do you think that's possible? [SPEAKER_00]: I'm like, assume your answer there is yes, but how do we get to that point? [SPEAKER_01]: Yeah, great question.

[SPEAKER_01]: I thought about this a lot, right? [SPEAKER_01]: So like, you know, it is clear that like a theory, like there's only two metrics that a theory I'm really wins on. [SPEAKER_01]: And again, just before that, like Solano wins on like Dex Volume, it wins on active users, it wins on transactions like all those metrics, [SPEAKER_01]: Solana wins on.

[SPEAKER_01]: The two metrics that ethereum it objectively wins on like have a have like one component like they have a time component to it, which is like how long an error cabin out for a long an error Has been out for but it's stable coin supply and it's TVL in both those things are important right there. [SPEAKER_01]: They're very important just to be clear [SPEAKER_01]: But there's also a time where Blockbuster did orders of magnitude more revenue than Netflix did. [SPEAKER_01]: Right?

[SPEAKER_01]: You know, I love it. [SPEAKER_01]: You know, like, you know, people can go and say, like, listen, you know, you're Theory, I mean, it seems like all the institutions are, you know, on Ethereum, it's definitely not all, right? [SPEAKER_01]: But you just like, all the news coming out, you know, like, there's institutions on this long every day.

[SPEAKER_01]: on my my response to that is yeah listen there is there's a time or blockbuster was doing 10x more than Netflix wasn't revenue look how that turned out right the answer to the question of like what's it going to take is it's going to take more time right so I think if we're also being objective I think it's pretty clear that like this last cycle most users like onboarded

[SPEAKER_01]: like most new users to crypto onboarded through like phantom and you know we're trading their first meme coin and you know things like that right and like you know historically you know like other cycles that were onboarding through sexes and then they were onboarding through you know defy summer on Ethereum and you know like there's users that you know we're like those users have been in crypto for a while and

[SPEAKER_01]: you know the like people like you know crypto is tribal and like that's okay there's like nothing wrong with that um i think it's gonna take more time right and also like just really hard engineering work to build useful products right like so long it needs to be useful in order for people to actually use it and

[SPEAKER_01]: You know, like meme coins is like everyone likes to look at salon and it's like, oh, it's this gambling chain right and you know, like it's like meme coins were, you know, like what salon was last cycle, but I think that's missing the forest for the trees because, you know, like meme coins contributed a lot to salon is like, you know, economic value, but you know, like trading one token first trading another that like the same like the same work applies right.

[SPEAKER_01]: That could have very well been tokenized Tesla stock, right? [SPEAKER_01]: And that's why if you look at like where X stocks first launched, it was Solana because it was the only network that proved that it could actually handle the scale. [SPEAKER_01]: And you know, I think it's just going to be continuing to do that, right? [SPEAKER_01]: Just continue to prove that we can handle the scale month over month, day over day.

[SPEAKER_01]: And then also more users to come on board, right? [SPEAKER_01]: Like, I'm not worried one bit. [SPEAKER_01]: That, like, you know, ethereum, stablecoin supply is higher, like, you know, and just look back to Blockbuster and Netflix. [SPEAKER_01]: I love it. [SPEAKER_01]: I think it's just a cheaper opportunity to buy a soul for me. [UNKNOWN]: Yeah. [SPEAKER_00]: Well said, man. [SPEAKER_00]: I mean, there are all sorts of opportunities out there, and I'm excited.

[SPEAKER_00]: I really am. [SPEAKER_00]: I think competitiveness is essential for any industry to push innovation forward, right? [SPEAKER_00]: That's really where it all stems from, is that a competitive environment inspires innovation. [SPEAKER_00]: And that's what we like to see here. [SPEAKER_00]: It's a nice little back and forth. [SPEAKER_00]: And again, we like to always look at both sides. [SPEAKER_00]: So Max, we appreciate your time. [SPEAKER_00]: We appreciate you coming on.

[SPEAKER_00]: Any other things that we should be watching out for from soul strategies. [SPEAKER_00]: Did we miss anything? [SPEAKER_00]: Any other final final notes? [SPEAKER_01]: The last thing that I'll say is just, you know, like we, um, we've been very focused on like the validator side, like you're going to see us over the next couple months weeks transition into other areas that are really exciting. [SPEAKER_01]: I'll leave it at that, but I'm very excited for that. [SPEAKER_00]: Awesome.

[SPEAKER_00]: You'll have to let us know what happens. [SPEAKER_00]: You'll have to keep us posted. [SPEAKER_00]: Come back. [SPEAKER_00]: Of course, when there's any big updates in, uh, you know, we're rooting for you here. [SPEAKER_00]: So appreciate your time. [SPEAKER_00]: Uh, working people, find more about yourself and soul strategies. [SPEAKER_01]: Yeah, definitely. [SPEAKER_01]: You can always follow me on Twitter. [SPEAKER_01]: My handle is Max E. Kaplan.

[SPEAKER_01]: And uh, soul strategies, you could go to soul strategies.io. [SPEAKER_01]: You can also follow us on Twitter. [SPEAKER_01]: Our handle is just at SOL strategies. [SPEAKER_00]: Awesome. [SPEAKER_00]: Well, once again Max, thank you for joining us. [SPEAKER_00]: We appreciate your time and to all the listeners out there. [SPEAKER_00]: We appreciate you tuning in as well. [SPEAKER_00]: We love doing these podcasts.

[SPEAKER_00]: We owe them every single week, but a quick little reminder in that we not only do these podcasts multiple times a week completely for free, [SPEAKER_00]: But we also have a great YouTube channel called the Crypto101 Podcast on YouTube where there's all sorts of market updates, rundowns, YouTube videos, tutorials, you name it, so check us out over there, hit the like and subscribe button, leave us a review of your on Apple Podcasts or Spotify.

[SPEAKER_00]: We'll see all of you at the same time, the same place next week. [SPEAKER_00]: Take care.