This is epicenter episode 454 with all hosts or some hosts may have Brian and myself. Welcome to episode of the show, which talks about the Technologies, projects, and people driving decentralisation and the blockchain revolution. I'm Brian Crane and Mahir Mahir Roy and Frederick it Ernst. So before we get started, we'd like to tell you about our sponsor for this week. So this is steak wallet. Stapled is your new favorite multi chain. Mobile Wallet. That puts the power of web 30 at
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And with that let's go to our host discussion right now I think is the first time we've been doing that for a while. We were just going through some, you know, potential topics before and ended up getting kind of walked out into an extended Questioning value, theorem and scaling. And then we were like let's just get started and we'll figure it out, sort of as we go. But maybe before that, how are
you both doing? I'm doing well, I just got back from here from Paris and ecc's with such a wonderful event. So, yeah, I feel very energized. What was that? What was the highlight of the conference for you? Somehow somehow I had EZ C, I end up missing our talks. So I literally went to like three talks my own and to others and they still talked with people 24/7. It's a very much felt like being at a conference and easy kind of manages to keep that Community feel while also having everyone
attend. So yeah, no, it's it's nice. It kind of feels like etherium couple of years ago. So hi, everyone. Maybe it's time to him. I haven't been hosting episodes epicenter episodes for a while it's mostly because of some health issues I had. But I'm I'm doing quite well right now. Yeah, getting back into into the crypto scene. These days one of the one of the questions I am grappling with is the Intriguing question of whether the etherium roadmap, Makes sense for The Ether holder like me.
So I've been like this long time, eater holders and I don't know, seven or eight years. It's this position that I never sell except to build the one Company, the company ran and I ran called chorus. And the the question these days I'm grappling with is this is the helium roadmaps make sense narrowly for The Ether holder. Not the etherium ecosystem with the title holder. Yeah, you have a yellow Twitter's read recently that Got some, got some attention.
What was the? What was the kind of the gist of the argument of your Twitter thread? Yeah. I mean I am kind of like realizing that the Traders said, got very popular, but maybe I should have approached it differently, I should have written it differently. So maybe I can tell you the gist of my argument, right? And for a moment like, for a moment like let's think not of crypto but of I don't know, the traditional corporate world, right, so so imagine like
Amazon, right? So imagine Amazon in 2005, it's been 10 years in the book business selling books online, massive success. And then it realizes that in building the book business, it has ended up building data centers and other startups, also need data centers. And so it decides to build another business which is AWS, right? Okay, it's going to rent out some of these computational resources. It has two other startups, so that they can build their other
products. What does Amazon do when it make such a decision? Well, it's structures AWS as a subsidiary. And apparent Amazon continue selling books and buildings building its Logistics chain right, dependent. Amazon doesn't say, I will stop selling books and I will only now be building data centers. It is okay, I will do both of them and the way we will structure ourselves is AWS, work will be as a subsidiary and the parent thing will continue as the parent.
So that's that's one way corporate transitions play out. Another way corporate transitions play out. You can take the sample of Elon Musk. Where is building these Tesla cars? And he realizes. Oh, in a world with lots of Tesla cars, people are going to want solar panels on their houses to charge this lockers and be emissions-free. And so, on this inside there, he realizes that people that he selling Tesla cars to will want solar panels.
So, The end up starting SolarCity ultimately integrating, Solar City, but to build solar City, Elon Musk never says, I will stop building electric cars so that I can build solar panels. So now, when you come to a cerium, the interesting, so what's happening in the etherium space in Atheneum, something I think that's something weird, is happening in this roadmap, actually, historically the way I have kind of viewed etherium, is it?
Helium is a place where you know people can come and write their smart contracts deploy them and like they can get customers. And that's the major thing that etherium has succeeded in over the last eight years and actually is helium has Normos traction, like no matter by what metric you you read. It is usually like 10 times ahead of any nearest competitor. You can think of in whatever metric you can think of.
And now, NN historically, historically theorems roadmap has been that people love hosting, the smart contracts on our Network, and we are going to create more capacity for them. Through our through the sharding roadmap where the more capacity will also Be run in infrastructure which is controlled by The Ether token holders, that's been the traditional starting roadmap now. Now if you'd have is Shifting has shifted to a very different vision and that vision is that Is helium.
This, this main chain is going to transition to being a chain that specializes in settlement and data availability, and maybe we can define those terms later on in the school, in our chat, and the job of actually hosting smart contracts and running them, and providing huge throughput to these smart contracts will fall on Networks that etherium calls l2's and these networks are by by and large done by other people's coins. So you have a network like stock
where that has its own coin. Like arbitrament hasn't own coin Etc and so if you give me is like saying that okay we will specialize in the role of settlement and data availability. And leave the job off hosting smart contract, daps to these other coins. And so in a way you can read syrians roadmap as in hosting smart contracts, like just like Amazon realized it needed data centers. Aetherium realize it needs a settlement layer but Athenians decision.
Is that it is stop. It is, it is It is going to stop investing in. Bringing more capacity online for the smart contracts that do run on ethereum, and it is rather going to specialize only in the business of data with data, availability and settlement and it's going to leave the business. It has one. So enormously in two, Other coins. And the thing I'm trying to think of is like, is that a
smart decision? Is it a smart decision to sort of abandon the winning horse that you have and bet on this sort of new business line, which is Canelo kind of like an RN d-- business line entirely to the detriment of your main business line altogether. And so, you know like this is this is the Crux of my inner doubts about The Ether roadmap for The Ether holder. Yeah, I guess one of the one of
the core questions nose around. This is, if you have these l2s and hdsl to stand, get a lot of adoption, get a lot of traction, you know, to what extent does this sort of Drive value for etherium? And I think it's definitely on clear, right? I think for sure, you're right, that there's no evidence that that happens. And of course, the incentives are not aligned, right?
Because to this entity is like value to be captured, you know, all of these l2s they will want their token to kind of capture that value. And I think right now, of course you have a big incentive to be kind of ethereal maligned and to be, you know, connected to a theorem and kind of work with easy, theorem daps but over time, That I become less relevant. Can we talk about how the anyone's and a todos OS if you're in the air tools work
together? So busy, I mean the Air 2 is currently need a theorem as a layer for for proofs, right. I mean basically I think I think a lot of the of the so-called are two is have done really good marketing and that basically we all know them as are tools and as far as I know, the only heir to that actually currently has five. Is a Bertram, right? So that's currently technically the only heir to the all the other ones are side chains, right? Like, you know using like the
correct terminology I guess. The less aspirational terminology. So basically your point, what kind of reframe basically? What would actually argue that most of the value that they accrue, they accrue as side chains. Anyways they don't actually need the file proves Right Said, correct map. So they don't like arguments at, like different different, like, scales. But my biggest question, my, my central question would be Is helium. Could have could play this whole game.
The same layered architecture. Very different. How well is helium. Could say that. Okay, we are succeeding enormously at hosting daps uni. Swap is a major Blockbuster running on our chain. We need a data, availability, and settlement layer. We don't have one. We need that we needed to scale. You see them could could could have said this. Let's let's build our own data availability and Settlement
layer. We Will We Will basically create a fork of the third token, so we will call it by some other name and this other coin, 20% of the supply can go to some set of developers that will build a settlement and data availability layer for us. And then the main ether chain would continue Rolling Along building extra capacity and use that settlement layer 2. Actually function as a roll up and scale and deliver more capacity to a winning dab. Like Unis, whoa it could have done that.
It could have done the opposite way around which is The current aetherium chain, it becomes the settlement chain. But then if Fork of The Ether, took in itself becomes a roller player that continues hosting units up and delivering it capacity that could have been possible or there is also an alternative to to say that. Actually, maybe maybe they don't want this brand confusion of two tokens. I bet to you, it is possible to create two chains powered by the
same. Token, one focal one focusing on settlement and data availability, and the other on delivering High, throughput to a winning application, like, Eunice warm. So these are all parts of the branch of the tree of choices that are available in front of the theorem community. And my central question is not about whether l2's are good or not, but why are these other branches not being Chosen and rather the main Ether, coin is abandoning this successful business.
In pursuit of an experimental business, like data availability, right? So, that's the central question right now. Now, because it is making this odd choice to abandon, the this winning horse, this amazing business, that it has today in pursuit of this experimental business. And I find that is a baffling and frankly even is to fit Choice, the web. Been that business. I am forced in a position where I have to critique this L1 and L2 system. I don't naturally want to critique l2's.
I think this is the cool architecture, but because the ether token is making this choice to pursue this experimental line and abandon the successful line. I am forced to critique the experimental line. So now we can go into like critique understanding this experimental product line and actually maybe even critiquing it. It a little later in this show.
Yeah. I mean one one thing as I also pay in kind of like thinking a bit about it I'm not as as knowledgeable as others about l2s but you know and I want to give credit here to Irwin. Who's you know, our Humanity needed at course one and we've had a whole bunch of discussions are about l2s and I feel like I'm more and more coming around to his argument which is basically and And this is also, one of the things that stood out to me when we did the orbitrim
podcast sort of like, in retrospective, right? Because you have the sequencer. And, you know, right now the sequence is run by, you know, one party. And I think everyone recognizes that this, maybe, like, maybe they can't steal your money, but one you have a kind of risk that they may have down time, but I think more important is the risk
around. Regulation around censorship and ok. Now someone can subpoena them shut-eye chain, you know, like so it is always, it doesn't work to have one party that runs an L2. I mean, maybe it works in some, in the case it's like an application-specific L2 and and the gaming L2 or something,
right? But I think for General a smart contract scaling solution, you know, you have to kind of decentralize and then Audi decentralize right then it becomes something where you have to decentralize the sequencing and now you have to have these different sequences. You have to worry about who is a sequencer at what time you have to worry about militia sequencer.
You have to have some sort of Sybil mechanism and a lot of that stuff is exactly the thing that like an L1 solves right to staking and Through those things. And, of course, the dydx choice was very interesting in that context as well like where they're basically, okay. They are being any theorem L2 on Stark where and they were basically they're basically moved to building their own cosmas chain. And it was exactly around that, that point of decentralization, right?
That they felt that as an L2, they just can't get the same Level of decentralization. So they chose to you know, build our own L1 and I think that's seems very sensible to me. Seems like a very coherent argument and I haven't so far. I think heard a strong argument against it and then I guess the other thing, the other point Urban also made the other point
around that, is that, okay? So the L to the etherium You know, you have this exit mechanism and so you have some guarantees, but the guarantee is only extends so far as to the assets that were like moved over from there. So now you start having I don't know interoperability or like you start having things that are natively deployed on the L2, right? Because you don't want to deploy it natively on the theorem because it's going to be too
expensive, right? And then the kind of a theorem doesn't really provide you security for that because you can exit that to Theory. Mm.
So I think all of those like I do, I do think the argument that like okay any L2 that like succeeds ends up becoming kind of like an l 1 1 because of decentralization and to because of economic incentives, as well, I think is very convincing and then I guess if that ends up happening then you really just have etherium A bunch of side chains, which is to theorem, and yeah, maybe theorem provides some other services to those side, chains like the settlement and data availability.
And like, I don't understand those things enough and I don't have enough of an opinion, whether you know, this is a really valuable service or not. So I think one of the one of the weird things I feel is that the the reason that L2 is will have a tendency to become independent l1's, is that it isn't clear. What etherium gives to some categories of L2 is not all L2 some categories of L2. So okay, maybe we can take an
example. So one of the most popular you know, up Inhale tools is this Stark where's chain, right? This is the one that dydx wanted to be on and then they moved away to Cosmos. So, When you think of like this L 2 today. It's very clear. What etherium provides this L2? Right. So today it's it's abundantly clear that the mains means thing like the L2 gets from etherium is a whole community of developers that would want to build stuff on their budding
chain. Okay. So imagine today is helium is at 150 billion market cap and then Stark with their token, dead, debuts in the sea December of this year at a billion dollar market cap. Small, small coin needs the community. It makes sense. Now, what does this small coin? Get on a security level, right speakers, etherium is trying to sell security and settlement to this small coin.
Now, when you look at the architecture of Stark where it is, each stunning project, like it is like, this is like the Sci-Fi future realized why is this the Sci-Fi future realized? This is like the first chain or not? The first time. They actually like the second chain the first being Mina. But this is the second chain that act that actually balances the that strikes, a very interesting Power Balance between Professional validators on one side and normal day-to-day users on the other
side. Now, what is this? Professional balance? So, when you think of like etherium in Solana, right? What like many will I go Solana is not decentralized. Solana is not decentralized. And it helium is the center. Why do people say that? There is truth behind it actually. So, in etherium, any theorem proof of steak, you can run a validator Fourier, theorem proof of stake in your own home.
You can run a node for if you have proof of stake in your own Our own home, which means if you are extremely motivated, you can verify all of the accounting of aetherium starting from the Genesis block on your computer without needing some fancy servers in a data center. Solana is not like that. So, in Solana, it's a bunch of professional validators that run
run the chain and chorus. My firm is like one of them and the chain is so massive that you can't run, you can't run a full node for that chain at your home. You can't verify its accounting sitting at home, whereas, in
aetherium, you can. And so there's these two families of architectures one, which goes, for scale and it abandons home users being able to validate the chain and then there's the tedium which says low transactions per second, but home users can validate the chain and so Two different universes, right? And like that soften the decentralization debate happening in our ecosystem now. Something like Stark chain comes along Stark which incomes.
Now it's mind-blowing because what start, which in can do is It can be a Solana. I mean it's it's it's design this year to be 500 transactions per second which is by the way, exactly the amount of load salana handles today. So stock the stock where change can do like 500 transactions a second. But what the stock machine can do is it can compress all of the history of its chain into a set of small proofs. And you can verify these proofs in any small computer on your home in your mobile.
And by reading these proofs, you can be sure that the accounting in that main Starkweather chain processing, 500 transactions. A second is correct. So this this kind of chain strikes, a power balance between home users and professional validators. The professional validators can use the fancy data centers to crank out the transactions per second on the on the chain. But the home users are not left
behind on this journey. Like in Solana, they can actually run their full nodes and be sure that the accounting is correct. That's the value prop of of starch. A stock chain has a second value prop, which is when you have to stop chains, A and B, let's start where and Minna If there's a bridge between those two chains that bridge is ultra-secure, meaning that chain and chain be a bridging to each other.
If chain a gets hacked completely by the validator set running chain, a chain B is completely protected from that hack, it will never process any odd transaction. Even if the chain on the other side is X, this is such an ultra secure page, and there is no custodian set of Sinners. So, this is like the Stark we're Magic. Another thing is like, okay. Now today is like eating 150 billion stock where 1 billion star player is an L2.
Okay. It goes to all of these conferences, it gets a community. Make sure marriage made in heaven today, but imagine imagine. Now, Yuna Suave moves to stock where or the big tabs move to start. We're in like five years start with, I don't know, 50 billion hundred billion dollar chain, which has more defy then Etherium because, well, it helium doesn't want to be an execution layer. So people naturally have moved to start with. And then what is Stark?
We're doing start. Where is sending these proofs with helium and then you see them is verifying them truce and saying, oh, the accounting or stock where is correct? But then Stark has an army of 10,000 nodes running in people's homes, also saying that the accounting is correct. Well, my question is, what does it helium provide Stark where What is the value prop is helium is providing.
If it is not providing a community of developers in the future, because it's no longer an execution layer. It's not providing security because like security comes from They're amazing mathematics. And the fact that this 10,000 full nodes running in the wild, So, when you see this relationship, you realize that in this L1 and L2 relationship. The L1 is not providing something of major value which
means like that. Be this L2 can really be thought of as an independent chain as a side chain and like that I think are wins argument like that. These things are actually like Sovereign and so the Athenian vision is actually like the cosmos vision of horizontal. By lots of different tokens. Now, I think this argument doesn't work so well, for arbitrament optimism. I think that's where it works very well for any Z key role of. So start chain the book bars and
these Loop rings of the world. This argument in worked very well there. So my hat, I mean these are these are tools are currently positioning themselves as a theorem. L2 is do you think this is just in interim strategic positioning so they can benefit from the developer Community around the theorem. Yes yes I think I think like that is That is that is like I mean there are many things humans do without thinking through the mechanics of why they are doing it, but like
their actions are optimal. But I think this is really what's happening. So I think when is helium goes to the world and broadcast. We are doing 50 transactions, a second and we are not going to grow this capacity. Instead we are going to grow into a data availability Direction. People realize that all of these successful projects on Assyrian, they are going to have to
migrate somewhere. And the main thing that any budding chain needs in, the ecosystem is developers to come and build on the Chain. There are so many questions in the world and so If you are, if you are faced with this problem, what would you do? Naturally you would go and you would become an L2, the perfect place. Where you can see this is in a this isn't a dark horse project against in again in the ZK World which is called book bar. Uqba are, when you go to Oak Bar, you realize that.
Okay. They are positioned as an etherium L2. When you start reading their blocks, you like their roadmap is like, so in the future, we are going to be an L1. But it's optimal to position yourself as an email to today because that's how the developer flow is, right. People that are unable to scale. They're saying on in, Syria need a house. Like you can be, you can be that house and you can find a community of developers. I think this is the odd thing
about about the iife. Like, this is the odd thing about the serum roadmap. Honestly, and I find myself sometimes like a with the exception of air. When I find myself also, A lone voice, this kind of thinking breaks down for a game theory, l2r. The game theory and to is actually need is helium even when they are big, I mean if they're massively successful they won't need is helium. But if they are you know, like going to be two percent, the market cap of here.
I think I think they better stick around with me tedium. So But I mean, but like, I don't know, look at polygon or, and as an example, they do, they need the theorem. I mean, that is a game theoretical to in essence. So today polygon is like a side chain. I think like, I mean, I'm not very up-to-date on polygon, which by the way is like major project out of India, major respect to U guys, like I grew up in India.
I know how hard it is to build a crypt to think there, but so as far as my understanding goes, it's a sidechain today with an ambition to be an L, do and actively working on a technology to be to be an L2. Frederica, would no more. And I actually I want to hear freezer because like she probably has a different very different view on all of this.
I agree. I agree with a lot of what you're saying so I feel like Back in the day when basically sharding and and proof of stake was merged together as the next upgrade, with the etherium roadmap, or the etherium project. And this has changed over the years, right? So, basically, in the, in the last two years, or a year and a half was always because it's
become apparent. That basically we won't have Smart contract charts for quite a while and the shards have kind of been reduced to a date availability layer. That I also have qualms with. So basically just become a date availability layer. I think this is Not ambitious enough and also not not the best value for money for etherium investors. I'm 100% with you on that.
The so basically my question is this has never I mean maybe in on E3 search and so on, but out in the open, it's never really been discussed. Should we kind of should be kind of Leave the smart contract charting for now and kind of just go to date. Availability it kind of it was just it was like, sneakily changed the road maps but without really communicating about it.
So there wasn't really an open discussion in the theorem Community Because by the by the time that most people understood that smart charts were no longer in the immediate roadmap. Every basically other Tax had been written. And basically that there was an understanding that basically would be date, availability only and so on, do you think this was a failing on behalf of the theory of research Community?
How do you see that? So actually I don't know, because for me, my subjective experience is I was in crypto, crypto, crypto shouting, shouting, shouting shouting shouting, I'm hit by cancer. I'm out of the game for 15 months, I return. And now it's like if he deems a data UCL specializing in data availability, right? So it's it strikes me like that, like it's like, that thing is probably is like, normally theorem communities like froggy.
Slowly boiling water. I am the person who's like, sitting in a hospital comes out and like, put deep into the water. Oh, you're a detail. If you teach your future is a data will change. The coin you're holding is for a data availability. Play no longer a smart contract, hosting play. So I feel the jerk immediately, right?
So, I don't know how how this happened and to be honest I'm actually like an outsider too much of the Much of the discussion in the in the in the in the in the theorem research community. And at some level I'm also like, I've never contributed their, why should they listen to me? Also, I can and I can also understand that but, if I had to guess, if I had to guess, What is helium's road map? Should be one way to maybe. Look at it is to think we had an
amazing. You had a math major like World computer roadmap where the idea was okay, every decent lies application would run on you cerium and we were building towards that vision and it proved hard. it proved how to build and it was also the case that a lot of other architectures emerged and It's kind of become clear that for many, many things. People will prefer the other architecture. So, the world computer vision
doesn't make sense. So we want to scale down our vision to something smaller that is also very strong. Write it in some way and it's this process of scaling down that has happened. And we have scaled it down right now, at least for the next two years to be data, availability J. I think there is this danger hiding in scaling it down this way.
I I think if scaling down has to happen and I think it has to happen, then Paradoxically the good scaling down is to, rather say that is helium will hold the biggest decks in the crypto ecosystem. This would be my this would be my proposal that aetherium, make sure that you NE swap becomes the biggest continues to be the biggest decks of the crypto ecosystem, and maybe I can kind of explain some of some of my
thinking here, right? By the way, this thinking is not related to what I've said earlier. You can believe in one while not believing in the other. So, So one of the very one of the one of the Curiosities that strikes me every time I so, you know, like as a validator, I am active in so many different ecosystems Kosmos Solana, Avalanche near I even look at silica.
And there's also some I follow tasers and I follow etherium, one of the very curious things about all of these ecosystems is The decks is the center of the smart contract map in every ecosystem. So what do I mean? When I say that, you can actually see this in action very clearly in in Cosmos where In will Cosmos what happens is every dap gets its own chain and then when daps want to interact with each other, they send cross chain packets to each other.
These are called IBC packets. And basically, you can inspect all of these IBC packets and you can know what the app is being called the most frequently by other daps, and you can build graphs based on such data and some of these graphs are available. In Cosmos blockchain explorers when you go and see those graphs, you realize, what is at the center? What the app is being called? Most actively by users and other applications. It's decks osmosis and it's like ten times bigger than the second
performant dab. Okay, that's Cosmos. Now when you go to a cerium you're like you initially, mm, this kind of data isn't available easily so you can go to actually the data about what that produces the most fees are actually medium its units, swap units of V3. And it's, it's probably five or six times bigger than the next thing, which is, by the way curve.
And if you think of like what is the first non decks smart contract, it's probably going to be 10 times smaller than Yuna Swap this pattern repeats in Solana again, where radium is the biggest and radium in serum, they have two different decks architectures. So one is a club and the other is this traditional units of like saying they are the biggest and then the next thing is actually smaller, same pattern, repeat sins, even silica it repeats. An avalanche Trader. Joe's has the biggest.
So you always hear us now the decks is like, always the damn Center and then and then I was like, I started to think, okay? The decks is the center in crypto and then I had the realization. Oh, the decks and oh, I realize the exchange is always the center in a City. So, I mean, when you think of like New York or Frankfurt or London, or Mumbai, you like, these are the Financial Centers of the world. What is common to all of them?
They have the winning exchange. The New York, Stock Exchange, NASDAQ, New York in Frankfurt. London will have the ftse there. You know, London, Stock Exchange, New York will have the largest tree so you realize actually like, okay, whenever you look at like a financial center city, The Exchange is still there prominent And the major thing that's need often is a great text. So if you're building, for example here, you're going to have portfolios.
If you want to change portfolios from one to another, you're going to need a decks. If you're building maker, your CDP uses are going are using your cdp's to get leverage on a decks. If you are a building an oracle, you need a decks, because that's where price Discovery happens. Every particular Dap You I can imagine you have been an nft where you are like you need a desk to trade your lfts, everyday app, you build, you realize it needs index is the
center. and so, actually, I feel The optimal way to scale down the etherium vision. is to rather say, We should be already have the winning decks of the crypto ecosystem. That's uni swap. Let's understand its value. And in the future let's just like make sure you nisab wins. And that's it. And if you do that every chain of the world is going to connect to you as a side chain, they are going to send tokens to you to trade at your winning decks and you will be the center of the world.
That's why I fought. This is, I mean just maybe I want to very briefly respond on that, Eunice for point. I mean, I don't think if your mom is like, well position to do that and I actually I am personally pretty sold on soda. I t.i. and it was Moses idea that like having the entire chain that's like optimize around the decks, it's going to be able to like outperform what you can do running a deck on top
of a smart contract chain. But that when I sort of talked about, like, I don't know, a very different way of looking at etherium. And and that's like looking at Bitcoin, right? So if you look at Bitcoin, right, today is still the biggest market cap by far. And if you look at Bitcoin you can ask like what are some of the things that are like not great about Bitcoin or some of the things that you know, some of the limitations and Falls of
Bitcoin? I mean, I think we can go through Right. So one is like energy. It has this high energy footprint, right? This bothers, a lot of people you know, it's not environmental concern Justified or not but you know, has a very large energy footprint, it pays a lot for securing the blockchain it. So it has a that's basically money flowing out of people earning Bitcoin, there's no smart contracts, right? There's no good Bridges to other chains, right? So you want to move Bitcoin. Over.
You have all these kind of trusted Bridges, the game thread, a property is a proof of work and not that great, right? So if you think of like the amount of money, it would take you to like attack becomes consensus relative to the value. You know, it's not that high and if somebody did that both lot of mining power attacks, it you can do Network, can't like, destroy people's mining Hardware. Right? So, From a game theoretic perspective, proof of work is like Soso and getting worse, right?
As the block rewards are going down. The finality is only like probabilistic, the blocks are pretty slow. This route was to do, you know? No, still Bitcoin is pretty, you know, fantastic? Right. Has a lot of usage, extremely valuable but if you look at it here, iam You know, proof State a theorem. Well, the energy for Prince, that's that's gone, right? That's going to be very small.
The cost for securing the chain again, it's going to be pretty small smart contracts, obviously, you have Smart contracts. Maybe they're not that scalable. Not that throughput limited, but you have Smart contracts right Bridges. Well, you have lots of great riches, right? Like, and you can, you can build great Bridges. I games here at a clear proof of stake is going to be, you know it's very strong, right?
I think I don't doubt that the theorems design is good in that sense finality is going to be better, right? Block times and faster, throughput, you know, not amazing but but better than Bitcoin, right? So actually on all of those dimensions, in a way, a theorem has like some significant advantages. Is over Bitcoin and now the has maybe some disadvantages to right? You could maybe say it's less decentralized. I think that's probably true.
And and I think maybe another disadvantage is, you know, it's more risky, right? More experimental Tech choices. And then, of course, the messaging in the brand is all so
confusing, right? Because the messaging and brand is like, kind of like, oh, well computer, but now data availability charting like this is, I think confusing for a lot of people, but just if you look at that, these fundamental properties in a way, I think it's Hyrum has and you know, the distribution is very wide with your lots of people have with your exchange integration, liquidity is great. You know. Like a lot of things are there.
So I think if Just look at it in terms of if you want, you know, decentralized store value, that can really function as this like, foundational financial asset in, you know, like a crypto economy. I think theorem looks like really good and if you, if you sort of look at it in terms of, you know, the size of that opportunity, I think that's
pretty large. So I think that that feels like, you know, cat and another way of looking at the theorem, of course that physician has also been articulated before, I think this is also sound money if and I think the bank list guys and a lot of time kind of articulating, some of these points but it's, of course not, it's not the sort of main theorem message, right? Then it's not the thing that, but, yeah, I am. Yeah.
I think that's that's another way of looking at it and I think if you sort of look at it and that contrast looks, it looks pretty good. And the upgrade looks pretty good too. Right now, the proof of stake upgrade. so I agree in in, in many ways, I actually think, Etherium with, like validation at home, the ability to run full nodes at home. It's going to be more decent less than Bitcoin someday in the future.
Those numbers will be so and yeah, I mean, if the future of ethereum is to is to be in this digital gold market store of value coin. I think I think it has a, it has a very competitive position and maybe you should pursue that pursue that market Yeah, it may be flipping Bitcoin on on that market to all that can happen. And if that happens, it doesn't matter that it that is data availability. Roadmap isn't isn't so good. It it's really immaterial that
it can. It can actually play around with any RND market and abandon its main thing. It doesn't matter because it's going to win a digital gold. I think that's a fair way of looking at the tedium and out here. I don't have a I don't like this spot for etherium and it's not a rational argument. I have it's like an irrational argument. I have I think becoming digital gold is how Grandpa chains. Go to die. The next the next ossified
chain? Yeah. It's like it's like Bitcoin, you know, it's like Started out like okay, like a financial system for the word on Bank, the whatever bank and Bank, whatever and progressively became older and older and older. It became a Grandpa and it became digital goal and it's not dead yet but I think Bitcoin will be below the top top 10 in coin market cap by the end of this decade. Yeah, maybe the world needs digital gold and maybe maybe it's not true, maybe it's.
This is the actually the largest market but I suspect I suspect. This is just A way to politely age and die in the crypto world. But who knows, it's very hard to have a rational discussion about this because because there are no numbers out here, right? Yeah, I'm a beast, this is that this is the bright future. Maybe this is how I need to look at the tedium to be happy about. It's roadmap to ask you something.
So, I mean, all of the layouts who faked competitors future competitors to a theory that we just talked about. Do you think part of the problem is that they are somewhat more closely organized like a company because etherium, basically, if you're just very decentralized, right?
So basically there it's it doesn't really have One, strong driving force behind it. And I mean basically sure there's the theorem Foundation but that's nowhere near as powerful, with respect to the chains compared to say that solanas and avalanches of the word, do you think this is part of the problem? That not enough of the brain time spent on a theorem. We spend on furthering the theorem proper road map. I hold it, I follow, but I'm not, I'm not, I'm not like an Insider.
I'm not a deep deep inside, right eye. So from my perspective, actually, from my perspective is he really has Enormous like from my personal, when you think of like leadership, right? Like leadership and roadmap I think Etherium is quite centralized is helium is as centralized as Solana. And I think it's a great thing for both the theory and Solana. Because when you look at EC idiom, When you look at metallic, he will give for presentations in a year like roadmap presentations.
And I'll be on Twitter and like the entire etherium Community is going to fly follow that road map. Yes, there are multiple clients. Yes, there are many development teams, But ultimately the entire vision of the chain is, is very much centralized and that's a good thing and Solana. When I see Solana, I see exactly the same thing. It's like, it's It's it's anatoly's vision and Anatole is just like metallic. That's hounding validators to make regular upgrades to their nodes.
I mean, in terms of in terms of vision, both of them do set the set the vision. So I don't think like etherium lacks a vision setting force and I also and I actually also believe all these crypto networks need one or two great leaders. I will set the vision for it because without Vision communities end up with, like debates and squabbles. I have seen that end in the
cosmos Hub also. So, yeah, I actually don't, I actually don't tend to see is helium as very decentralized when it comes to Vision at some level. I just feel like I want to reach vitalik some way. It's like I want to I want to write something that like metallic leads and like Like it. It's like he even reconsider z3m road now for like 15 minutes. I mean like that would be probably like the greatest thing I can do in in this short life I
have. So I'm like, no. No. It's helium has exactly the right structure. They should be like Vision there. They should be leadership, is helium. May not look like a corporate but it has everything in the right place. I just think it's like making this, I don't know. Some kind of like structural error error here. Is that very controversial? Do you think, do you think differently that like the theorem is way more decentralized when it comes to vision and Salon?
Is not. No, I think the vision part is not so much the problem, it's more, the, the size of the R&D Department with respect to the economic force of the chain. I feel like currently the R&D arm of etherium is small compared with. Yeah. I mean like, yeah, maybe maybe one way to State your objection would like what you're saying is it's not an objection. What you're saying is In Tesla, when when Tesla stock goes up 10 x, it is Elon Musk makes like 50 billion dollars.
But out here like ether token even if it goes to ten thousand dollars, each etherium researchers. Well, they got the grant of etherium tokens of eight years ago, maybe we tell. It got is Grant of tokens eight years ago. It's not going to make a difference to to their stash. So maybe maybe like that's kind of that kind of incentivisation. Of is helium R&D from the third token holders. Maybe that is this thing that's
actually broken. I don't, I don't think that I think I would, I would object to that. So basically, I think over the last couple of years, my experience is that money is an extremely bad motivator. So I mean, obviously once you have like enough money obviously, like more money is nice but it's not something that really makes people who work harder or that makes most people work harder, I think harder, whatever.
It's kind of it's more the sense of Being valued in the community and basically control basically being seen and yeah, I and I maybe we don't. As maybe as an ecosystem, we don't taste enough value on researchers. We maybe we don't, I don't know. What do you think? I mean, II think this is in general like a challenge in like how do you, how do you get like a large group of people to work on, you know on this kind of common goal without any
framework of? You know it's like an Enterprise and to kind of traditional corporate structure or even if I'm a she knows. Right? And and I think that's really that's just very All right to scale and I don't think anybody has figured that out. I don't think any crypto project has really figured out. Okay. How can we now have you know? 100 companies or how can we have, you know, a thousand people like all, you know, driving this chain for with him
and working on this. I mean it kind of have, I mean, they can be part of this ecosystem, they can be kind of like a line and division do things about it, but when you comes to the actual core Tech and development, think all of them there's like small teams. When you have okay, some like Cosmos is actually pretty decentralized in that. There's a lot of companies doing co-development but I mean I guess like you theorem, although maybe theorem is probably even
more decentralized, I think. But then it comes with a big cost, right? It comes with a big coordination cost and it's like a slow things down in some way. And then I think that's just a very important problem that is
crucial to figure out. Then I think. ideally then you'd have that some percentage of, you know, the inflation goes towards, you know, co-development and you know then if the market cap goes up the budget increases and it accelerates progress, more gets invested And now a theorem of course doesn't have that kind of Treasury mechanism, but but I think even change that have some kind of Treasury mechanisms. I think the mechanisms to deploy that effectively to monitor that
have accountability. I think this doesn't really work well anywhere. Right now now, of course I think it's an extreme experiment with doing as I mean I think if let's say I was to start a blog saying, definitely, I think I would be like there should be a non chain treasury, some kind of governance, you know, deploying funds to like Drive the ecosystem forward. And I with him, doesn't have that probably is never going to have that.
And I think that's also a disadvantage, but, but I also think it's, you know, it's an unsolved problem that other chains aren't necessarily doing. I mean, they're doing it but they're not doing it particularly well, so conclusion. We need my hair to have like a quarter of an hour time with metalic. No, no, no. Maybe, maybe, maybe I'm wrong and but yeah, like it's really interesting how these different ecosystems are pursuing the Skilling Vision, right?
Like, it's Solana Cosmos material, Avalanche and actually which which one's going to be the Best Vision thing? Like that's like one of the most interesting questions of our of these years. Yeah, I mean so basically when you say the vision, you mean vision and execution, right? Because they kind of there like one pack, right?
So, I'll give you an example, this like many men, you see Solana. So the interesting thing about Solana is that first of all Solana, accepts that people won't be running a full nodes to Solana on their homes right now. When you accept that trade-off, when you look at like, Solana's technical roadmap, you like actually, without making major changes to any of the engines, any of the code bases they have Like this network. Today actually, processes 500
transactions. A second, a genuine user transaction is not like votes or anything like that, genuine user transactions. This network on their core technology can go from 500 to 50,000 to 100,000. And in fact, like wave three years ago when I met Anatoly, he was like will do a million. Their sacrifice has no nodes at home. So Solana is kind of like this network where Divisionist set. And it's like, it's like about
execute execution. Like there are like, I don't think there are like major pivots that are that are needed or coming to coming to Solana. so I think like if we are that's how that's how I understand this Ilana vision is like It's like the path to a million TPS is like, just so set at, right? The In this so much in the early DNA that it's like just about like executing that path the theorems different ethereals.
Like actually we don't know and the theorem is like pivot after pivot, after pivot is needed to actually scale transaction the transaction capacity but on the other hand. So I mean when they're couple of chain holds on to Lana recently and I mean, we've never had that on a theorem, right? Tonight. We had a few change horses in Assyrian on Solana and every time there's a chain halt.
I I is it's a big shock for me because like okay because actually like we are running one of the big validators there. It's like sometimes number to buy steak or number three ways, they were something like that. And so now we have to play a major role in starting this chain up. So I so these episodes they are not like media events for me they're like you know, six hours. Hours of my life burn through each of these episodes. So I think it's Alana The thing is that.
At least reichman they published the root cause analysis of these three down times that happened in April, May and June, and from the root cause analysis and the, and the patches that they have these, these look like they are, you know, like fixable errors. Errors that are fixed designs. That are fixed. There's a transaction fee Market, coming to Solana in the next release. And I think Anatoly already announced the upgrade, so I think like these will go away.
But yeah, sometimes like deep down, I do wonder whether like some cold design decision, especially in the consensus algorithm is like, is all of it, solid, right? Like so. So even I like, I have some, some measure of doubt about the, about, like the core consensus algorithm. But like these three down times, that happened this year. They appear to be like programming errors or economic logic errors, that will be fixed
as for the root cause analysis. So I think for Solana like the best hope is, you know, like that's actually true. And this network will have a measure of stability in the future. But in Solana, the thing I would say to Solana is I think in Solana, nobody's kind of actually prove that that consensus algorithm is highly sound. This is different to Tender moment where tender mint is like a 20 year old studied algorithm. So amazingly different. I mean I would hope that in the
future. I see I want to see like a proof that Solana's consensus algorithm is like, it's like, you know, battle like is like, is like sound under like the academic sense. I think like, this is what I feel is kind of missing from Solana for me, and whenever Solana goes down, this is what I ordered very old. Did the consensus algorithm break or is it like some coding error? And this year, the things were like coding errors and like, those are like less dangerous
and I think those will be fixed. So that's, that's where that's where I find myself to be. So, where does that leave us? My hair. If you look at the theorem roadmap, what part do you think should be accelerated? Actually, I don't know. I thought actually, they just if the roadmap is, the data availability, the data availability Direction. Then I think, actually, he seems
kind of like, doing well. Maybe, maybe the one thing, like the one thing in the data availability Direction, I do feel genuinely curious about is Weather. The Avalanche consensus algorithm is just so much better because if like, is helium has to be like this settlement layer, then you want stuff to settle quickly.
So you want finality, quickly now finality in the current is helium system is like 10 minutes whereas like finality in avalanche, average, vanity in Avalanches at 500 milliseconds, right? So thousand X faster. So when that consensus algorithm kind of exists and you want to be a settlement layer where speed methods a lot, maybe I think like that's worth evaluating but even if it is helium, doesn't do that. Even if it's like, okay, data
availability is the future. Then I think actually like The roadmap is pretty good. I think like the engineering roadmap, I have, I have nothing to nothing to say about it is the premise that it's a data validation settlement chain that I feel quite uncomfortable about. So yeah. What do you think Friedrich is? I have spoken a lot today. What do you think? And super happy that you've spoken a lot. Yeah, I'm glad you're back. I see your points. I think you, you make very good points.
Yeah, I need to think about it more before I reply. I think. Brian, what do you think? I think I some I I somewhat agree, but I think even if even if it isn't has a more limited role, it could still play. You can still play an important role in this sort of, you know, decentralised Financial world of the future. And ether group play an important role, and it could be a so divided. Like hop like thing. Even if it doesn't secure those l2s but let's see quit.
So I think we'll have to do an update episode on this and like you know 12 to 18 months and see how it played out. May I, what do you think? The right time frame is so, I mean like if you wanted to convert this into a financial bit, I think I think it's actually pretty easy. So my financial bet would be, you know, like this spread trades that you have, which is long L Too Short L1. So long polygon short a eat long sustained. Long noses, change short teeth long.
Long, whatever star coin will be there. Long stock going short eat. If you have a basket of these, we can Define this. That they will outperform because I actually believe that the value will migrate up like so helium base. Layer stack settlement, then the execution stack, then smart contracts, then users devalue will migrate from the from the settlement stack to the
execution stack. So when you have like this long polygon, Shorty straight that is what you are betting on and maybe we can actually convert this into a basket and we can like monitor it over five years. So, so I think like the relevant time scale is like five years and I am actually even find to even convert it into a financial bet and and, and monitor it and beings that I see three keys on the other side.
Knows his prediction markets. We can if we can prediction Market. If I, this I am, Fine to do that too. As a as a governance feature of some kind, let's do it. Cool. Well I think we can settle the the mechanics can be settled afterwards, but the thanks so much. It was a it was a pleasure to speak with you both and it was especially nice to have my hair on again and to hear about his faults in here, which I think are definitely interesting and
pop working. And I guess he's already some nice discussion that into incident Twitter recently. So hopefully, this episode will trigger some noise. Ocean. And who knows? Maybe with a like, listen to it. And And and have a have have have a green tea, red wine, and Ponder the future.
So all right with that, thanks so much and thanks so much for listening is for tuning in and supporting the show if you like it. Make sure to subscribe or leave us an iTunes review and we look forward to seeing you again next week. Thank you for joining us on this week's episode. We release new episodes every week. You can find And subscribe to the show on iTunes Spotify, YouTube SoundCloud or wherever
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