I'm not bullish on any of them because you need like a very
specific set of circumstances to be true for a liquid staking to
repeat the kind of success story that it has on here.
The first thing to understand about ETFs in general is like
they will basically all compete on price.
That's why staking ETFs are going to have a big advantage
over non staking ETS just because they can pay you right
from the rewards like your balance is still going to grow.
It is actually a very good and like attractive product from
talking about restaking and talking about institutional, you
know, demand. Like the problem from here was
like in both cases that the staking setup that Lido gave you
was not flexible enough, right? It was opinionated.
It was not putting your money in restaking.
You were getting the same returns as everybody else.
We're not able to choose. We are not or red eyes and like
what mainly we release they use and if they use DVT or not.
And so I think the idea of vaults is a very kind of organic
one. Create your own staking setup
with your own not a radars and then have the ability to mint
the liquid sticking token like an RK stake if against that with
a collateral ratio that that is based on on that vaults risk
profile. Hello and welcome to Epicenter
of the Show, which talks about technologies, projects and
people driving decentralization and the blockchain revolution.
I'm Brian Crane and today I'm speaking with HASU, who is a
crypto researcher and writer and strategic advisor to Lido.
Of course, Lido's need much of an introduction, although we
will introduce it, but Lido is the leading liquid staking
protocol and one of the leading staking projects.
So really exciting to talk about Lido and, and, and some of the
evolutions that Lido's gone through and that are upcoming
for Lido. So really excited for that.
Now, just before we go and talk with Hazu, we'd like to share a
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How's you actually you've been on before.
It's been 4 year, almost 4 1/2 years, so a long time ago.
It's good to have you back on. Yeah, the episode was a long
time ago, I think with Kane from Synthetics or something like
that, if I remember correctly. Yeah, about liquidity mining.
Yeah, when like all of that started, right?
It's, it's crazy that like liquidity mining was this topic
that like there was a time when liquidity mining was like so new
that we had to discuss it on the podcast, right?
That's what it meant. Yeah, it was the stone ages of
defy back then when you were still using a, a manual, I don't
know, living in a cave, but starting to defy.
Right. So how?
How did you first get involved in crypto?
What's your crypto journey? Yeah, I think the the kind of
short version is I was a professional poker player for 10
years. During that time, you know, what
started as a hobby and like, you know, an activity where are you?
If you, you know, you were motivated and you were somewhat
intelligent, you could make a decent living.
Like it became much more, you know, a sport over time, or I
would say like a kind of became professionalized in many ways.
And if you wanted to to be a top player, you had to work with,
you know, what's now known as solvers like kind of type of
like chess computers. But for poker, you had to, you
know, build software. You had to study a lot using the
software, try to improve your game and I over time I became
more and more. You play poker, but then you'd
have software to help you decide what hands to play.
So no. So you weren't allowed to use
any of the software in, you know, in real time.
The same way if you go to likechess.com, you're not
allowed to use a chess computer on the side.
That would be considered cheating, right?
But with poker, how do you check that and is it sort of an honour
space? So at the time, basically, you
know, the kind of poker so of us weren't really commonplace yet,
I would say. And the ones that were out there
were like pretty crude. So it was actually not easy
technically I think, to even try to get that to work, to use it
in real time. Today it's a different story.
I like today you can get those things for like, great cheap.
They're very fast. And so, yeah, like today
actually, you know, pretty much anybody could cheat probably an
online poker if they want it. And that's why it's a big reason
why the game is kind of dying. And the the main games are like
the biggest games now are played exclusively between people who
know each other. And it's like reputation based.
And you know, a lot of cases also people just play offline
where you maybe you don't have the same challenges, right?
That's interesting, right? That's kind of like maybe
general, you know, it's interesting to think about that
because with AII guess that's going to happen for like all
kinds of stuff, right? They so far had like, humans
compete and then you're like, yeah, this is not really work
for you anymore. Yeah, I mean, did you see this?
I don't know. The other month there was a a
scandal about somebody had like invented a systematic way to
basically cheat in in job interviews online using AI.
So of course, one, we have this issue like all the time, right?
So we have it or first of all, you know, we ask like questions
when people apply, sort of like essay written questions.
And then I think, you know, I mean, our team is like, ah, this
is an AI generated answer. But you know, of course, I don't
know how what's the detection rate is here?
And but then I think we've also had various cases where, you
know, our team like suspected or, or where clearly people
either clearly people are using, you know, live in real time as
they're getting asked questions using like ChatGPT to get their
answers. But then I think in some cases
they're like, OK, that's definitely happening.
But then other cases they're like, not sure.
And it's very tricky. Yeah.
So I mean, chess had this problem before poker because
chess computers existed, you know, probably a decade or two
before poker like poker service did.
And they have, I mean, they have killed like poker chess that's
played for money, like to a big degree like that used to be
played for money, same as backgammon.
And those games got basically solved and like cheating became
too easy. And so, you know, the trust
problem was basically insurmountable.
But there is, there are also forms of chess.
It's called Centaur chess Centaur because you know, it's
like, you know, the Centaur is like half horse, half human,
right? And like a Centaur, a chess is
basically like half human, half AI.
And so it's the idea that, you know, you can have a IS compete
with each other. You can have humans compete with
each other. But if you throw like a human
and an AI together, it's still a challenge, right?
Like, you know, to beat another human and another AI in
combination. And so it's the idea in a lot of
ways that, you know, yes, like a IS will play a much bigger role,
but like an AI that's somehow bundled with a human or
controlled by a human will always be more effective than
just a human or just an AI. And so that's the case for chess
that like human plus AI beats AI.
Yes, it actually did. Yeah.
Like because I mean, there are many cases where I don't know
how it works now, right? Like, but in in in poker, there
were many situations where the AI was actually completely
indifferent between choosing like one of two or one of three
options in a given situation. And whenever something is close,
I think human intuition come, you know, can play a pretty big
role. Also AI like depending on how
good the abstraction was that basically the game was solved on
because you you know poker is too big to solve like the full
game quote UN quote like you have to make a simpler game that
is kind of an abstraction of the bigger game.
Then you can solve that, but then you have this abstraction
step also back right. So because they, you may in the
solution, you see like, oh, I'm supposed to play this situation
in this way. But like, if you're an expert
in, in, in solvers, then you know that the AI probably never
got to look at this exact situation.
This is only part of like a bucket of like 1,000,000 similar
situations that it, it's all grouping together.
And so you know, if you are, if you know these things, then you
can add a lot of kind of intuition and like nuance on top
of maybe what the AI is already disgusting.
I mean, that is, I guess the great hope we all have, No.
Is that like somehow, you know, we'll be able to like leverage
or merge and cooperate with AI in ways that, you know, we can
amplify what humans can do and and you're not just become made
redundant by the computers. Yeah, I think so.
Right. And this goes back to what we
were talking about in job interviews and so on.
I like to the degree that we're still trying to test human
capability, I mean, we now need to test like human plus AI
capability, right? How good are you in working with
AI? And I mean, the, the most
obvious thing is like the things we test for can become much more
complex, right? Like much bigger in scope,
right? You where previously you would
send someone like 5 questions to answer, maybe you now give them
a much more expansive work test that that fully acknowledges
that. That is a great point, right?
Maybe one way to go would be, or maybe that is the inevitable
thing to go is that you say like, hey, we're going to do
this interview and you explicitly are allowed to use AI
and then we're going to see. But I don't know, it's tricky
one too. I guess you'll have to totally
redefine how the interviews work.
Yeah, yeah. And I mean, you can even
include, you know, let me what you use AI or like documents,
you know, give me, give me your, your prompt history, right?
Because even the way that like somebody talks, I'm like, OK, so
I, I like a lot, a lot of people I know are saying, I mean, I'm,
I'm not a manager. I'm, I'm more of an IC, but I
used to be a manager in the past.
And I think the way that you manage people, especially more
junior people, is very similar to basically how you would
prompt an AI. Like I see a lot of parallels.
And I think a lot of my friends who are managers saying the
exact same thing, they really see very little difference
between like how you correctly prompt an AI and how you, you
know, you delegate a task, for example, right?
And you know, that is a thing that you, you know, first of
all, like humans are going to get much better at delegation, I
think, and, and management as a result of having an eye because
all of us have like, you know, 1000 junior employees if we want
like from now on. And you know, you, you can test
those things, right? Like in the past, it used to be
actually pretty hard to test someone's management skills in
an interview setting. But now you can, you know, you
can have a real kind of simulated management
relationship even just by looking at someone's prompt.
History is very interesting. Yeah.
OK. OK, very interesting.
But let's come back to the top. So the crypto question, so
you're playing poker and then. Yeah, so I was playing poker,
but I I realized over time I became, you know, fell more in
love with the studying aspect of the game.
You know, this way of like working with solvers, but like,
mostly like thinking about the game and talking about the game
with other people and kind of like unravelling it.
You know, it's mysteries and, you know, finding new ways to
think about it. And, you know, I was always part
of a group with other people and we were kind of coaching each
other and I was coaching and some people.
And, you know, I realized that this coaching, this like
studying and coaching aspect, like I was much more motivated
by learning and teaching other people than I was at some point
by competing. And I knew that, you know, when
I'm done with poker, I want to do that full time.
I don't, I didn't know what topic, but I knew basically the
form factor that that activity would have to take.
And when I, you know, later found crypto, I like crypto was
always kind of maybe a little just like rights outside my, you
know, my orbit basically. So that I knew a bunch of my
friends were already like buying crypto since 2013, 2014, you
know, making money and dabbling with like trading.
And also we were using it to send funds back and forth
occasionally. When I then started to actually
look into it, I very quickly fell down the rabbit hole and
then decided that, you know, this would be the thing that I
want to spend probably the next at least decade of my life on.
And you know, I, I already knew what form factor I wanted that
activity to have. And so I for the first couple of
years, I only basically focused on studying crypto from many
different angles and write about it, tweet about it, make a
podcast about it. And luckily it turned out that
poker, I would say, sorry, crypto is actually uniquely well
suited to such an approach just because it's so complex and so
interdisciplinary. You know, you really need to
kind of understand a lot of different aspects ranging from
economics, politics, law, computer science, game theory,
like the you can look at this from so many different angles
and always find like new interesting ways and lot of good
insights come from putting those different perspectives together.
Yet crypto was still so new as an industry that somebody could
come in from like totally kind of the outside and you know,
just by being a generalist, you know, catch up to whatever is
the frontier of that industry or then maybe two years and then
start making net new contributions to the industry,
right? And I think when you come into,
I don't know like math or physics or real like certain
really many that you even AI probably like come into many
other industries, you won't be able to do that.
What were the things maybe before Lido that you know, the
the rabbit holes you've been down on that where you, I don't
know, like got you most excited or obsessed?
Yeah, in the beginning I was very focused on Bitcoin.
I thought this was the, you know, the main thing to
understand first, which is send me down, you know, the rabbit
hole of, well, what is money? You know, what is how does it
work? What is banking like?
I, I could tell that there was some truth to, I think what
Bitcoiners were saying about maybe money in the banking
system, but also there was so much stuff that they were saying
that was like simply wrong, right?
Like I think all of the ideas that Bitcoin people have about
fractional reserve banking and like all of that stuff and Fiat
money in a lot of ways is it's just like completely not true.
But there was the kind of interesting, like they were
right about some parts. I mean, the, the relationship
between like government and, and money, I think was, is like one
good example of the way that money can be weaponized and, you
know, or like used to control people and societies.
And so I thought that there's, you know, an interesting
connection here, But I think I, I mean, I quickly ended up
thinking that Bitcoin competes much more with gold than with
the dollar. Yet at the same time, there's
like a hierarchy of money in, in, in on which like both gold
and the dollar also exists, right.
And so it was kind of for me that was a very like formative,
I think couple of years like just like getting, building up
all of these mental models to make sense.
And you know, Bitcoin for me was very interesting.
Like I, I could see the value for sure.
And once I did, once I had that part kind of locked down, it was
more about like, OK, how does it actually work?
How is it, how does it evolve? Like how does it evolve?
How is it governed? What are like the social systems
kind of on top of maybe the technical system that is
Bitcoin? What if we what if we have, you
know, we have this model of like how Bitcoin works, but what if
we play it out 10 years into the future, 20 years into the
future, How does it change? And like for me, if for example,
the idea of Bitcoin security model and the the block subsidy
that that is going to run out. That was like a very clear, like
that wasn't even a long tail risk.
There was just a fat tail risk, right?
That for some reason was like illegal to talk about.
Yeah, that's still something that worries you a lot when it
comes to Bitcoin. I, I think it does, I mean,
it's, it now worries me a bit less than it has not be.
I mean, fees are still very low on Bitcoin, but I think now that
Bitcoin is starting to have a bit of a layer 2 road map.
And you know, we, there is actually, we're starting to see
some reasons why people need to use the layer 1, you know, maybe
for DA may, maybe for settlement between different layer 2.
So I think it is at least easier to envision that that
transaction fees at some point like there is enough kind of an
economy on top of Bitcoin that, you know, you don't have to
worry maybe so much about that. Yeah, yeah, it still bothers me
as well. I do think it's a big kind of
thing that people Bitcoin just, I, I think it's also the sort of
software. People talk about the risk for a
while, worry about it, but then they're like, is there anything
actionable you can do? I'm like very hard right to do
anything and then you just sort of forget about it.
And then you ignore it, right, Because it's like, well, the
risk was discussed, you know, it didn't go anywhere.
So then like no point to sort of like people aren't interested in
revisiting that discussion. So I, I feel like now it's
really, I feel the only time when this will become a big
topic is when it's actually when there's actually real security
issues. Yeah, I, I actually thought the
other day I was asking myself if I have become like more jaded
and like more, I don't know, less kind of willing to like
push for big things in crypto. Because when I, you know, when I
was new to crypto, it's very much like, Oh yeah, the security
budget in Bitcoin, that's clearly a problem.
Let me write, you know, like let me tweet about that, like and
write articles about it and go on podcasts and discuss it with
everybody. Like seek out people to discuss
it with. Try to lobby for not even for
changing something in the beginning, but like for getting
people to agree that it's a problem.
So we can have a discussion about how to, how to address
that. And I was, you know, there was
like an uncomfortable time, right?
But also like in time of basically like extreme growth.
And now, I mean, I, there are still of course like things that
I would change in crypto, but I, I was wondering if I kind of
still have that, you know, same maybe energy and like this
confrontational energy is why, right?
To kind of go out and, and, and like just single handedly push
for like something to change. And yeah, it was, it was a kind
of interesting, maybe look in the mirror.
So, you know, maybe it's time to go, maybe go back more towards
that. Yeah, of course.
It's so hard to make changes right when it comes to some of
these things. How did you get involved in
Lidl? Yeah, I mean from Bitcoin,
Bitcoin at this very simple scripting language, you
couldn't, I mean, I, I'm not very technical, but it was clear
to see that you can't do very much with it, right?
Like when you're in Bitcoin, you don't have much maybe have an
appreciation for what Ethereum is trying to do in the
beginning. But for me, the time when I
started to really pay attention was maybe about like 20-19 when
some of the first Defy apps started to launch.
And for me, that was a sign that wow, this is really interesting
because you know, this isn't just a, a kind of fork of, of
Bitcoin that's maybe doing like some things differently.
This is really adding a new dimension to what crypto can do,
right? The idea that you can build
smart contract platforms, you can have these decentralized
smart contracts. And this is in some ways it's
like it's super set of Bitcoin, right?
Because like you can like any token can exist.
Like a token is just a a smart contract, right?
It's just like a smart contract account where people have like,
you know, balances, like like, you know, signatures and and
balances, right? And so, yeah, that for me that
that was really eye opening. Kind of you see those defy apps.
And at this point, I think I gradually started to spend like
more and more of my time looking at the theorem and looking at
Defy in particular, because all the prior research and like
education that I'd already done on, on like how finance works
and money and those things for me, I think for me, Defy clicked
much earlier than for other people because of that then
because I had done that education in Bitcoin.
And I mean, you still have like just I locked on Twitter
yesterday and, you know, there was like a threat from like a
top tier VC who was like talking about how we can bring like algo
stables back and like, whether this or that hasn't been tried.
And it's like this just like extreme misunderstanding of like
how banking works and like how money works.
And, and I'm like, yeah, like, you know, sometimes you don't,
it's hard to appreciate. Like, you know, what do you what
do you know, or like how how that's not, you know, you
shouldn't take that for granted in that sense.
So I didn't. So there's like a lot of people
even in like Ethereum who don't know even like the first thing
about finance and and and so on. And like we are I think we are
still like early in in kind of understanding defy and
appreciating that. And yeah, so like more and more
defy happened on Ethereum. And then I think at this time I
was, you know, you had George us on the show probably a couple of
times as well. Like we were very close back
then. He was still, George was still
living in Europe at the time. And we were working very closely
together, writing like a lot of research articles and doing kind
of just like explorative stuff in the theorem ecosystem.
We were very, you know, when this was before IEIP 1559
happened and we were very focused on topics around MEV
and, you know, transaction fee mechanisms, which also like grew
out of my interest toward transacting fee mechanisms in
Bitcoin and how if we maybe change that, we can change the
way that like, like how much fee revenue can be raised from
people transacting, right? And so it was very natural for
me then to ask those questions in, in Ethereum.
And I gravitated a lot towards this EIP 1559 proposal, which
Vitalik had made I think already like 2 years before.
And it got, but it, it didn't, you know, he never really pushed
for it. It didn't really catch on.
And so it kind of laid dormant. And then there was a kind of
push to revive it and bring it back.
And we were like, we were doing, I think some data like
simulation based analysis about that and writing articles about
it. And, and you know, one of the
topics that we were interested in was basically staking push
because Ethereum at the time was, was about to switch to
proof of stake or like proof of stake had been in the works for
many years. But that was one of the things
we wrote about. We wrote an article about kind
of staking pools and like the difference between centralized
and decentralized staking pools and staking derivatives.
And we basically concluded that in Ethereum there was like a
really good set up to create a decentralized staking pool in
between and like for this staking pool also to have
advantages over over centralized staking that would kind of give
them a leg of an adoption. And between those staking pools,
you had a rear, or at least we thought you had a rear kind of
winner take most dynamic because you could introduce the staking
derivative that could itself become a building block for like
other things and like be used in other, in other Defy apps and so
on. Because, you know, like, even
like tokens themselves, I just like, you know, have liquidity
effects and network effects and like, and so on.
We thought that basically because taking derivatives are
going to be when I take most, that means that staking pools
would also be when I take most. And yeah, that article was very
influential at the time. And we why I mean, Paradigm was
already an investor in in, in Lido and I connected with the
Lido team over that article and we got to talking for a couple
of months and, you know, maybe like like half a year later, I
became an official advisor to the team.
Yeah. I mean we were also correspond.
I think we started talking about, you know, like liquid
staking idea in 2018, right, like right when you started it.
I mean, it's such an obvious idea, right.
And then we were, I think we did built the first like liquid
staking thing for Cosmos in like a hackathon in 2019, I guess.
Yeah, also a long time ago now. Then we wrote this big kind of
paper on, you know, the risks and how to do it.
And although it's kind a little bit focused on Cosmos, actually,
I remember we were also thinking about Ethereum a bit at the
time. But we were like, ah, withdrawal
thing, like how can you do it? Like, you know, that was one
thing, of course, then the having the kind of multi sig
initially or, you know, if the threshold signature was like and
and then the other thing was like, oh, but the LDO, it's just
like looks a lot like a security in some ways.
But I think in the end, in the end, I think the choices, right?
And but then of course, we were very involved like as well,
right, and like launching it from the very beginning.
But I think in the end it's also something where we kind of saw a
lot of people were much more conservative back then in terms
of regulatory risks, right? And I think we've kind of seen
that. Yeah, just the the winning path
of, I think I've also been just, you know, go ahead and do it
right. And you did an ethical way and
try to have decentralisation and be honest and stuff like that.
The the right level of risk in business is almost never no
risk, right? You know, there's almost like a
form of controlled risk that you want to take.
And I think what, what I mean, what matters at the end of the
day is that, you know, you, you do stuff that like, let's just
look in the mirror at the end of the day.
Yeah, there's like so many things you can do that are
risky, but that are also unethical.
And that's like things you can do that, you know, maybe are
risky, but not, you know, in a way that you hope is going to
become less risky over time. And also that, you know, you
have no problem justifying to yourself because there's no
other people getting hurt from that.
Right? Like it's like net good for the
word, I think so. Yeah, I think that's definitely
one of those examples, yeah. So of course in the beginning,
right, Lido, yeah. So there was basically kind of
like a multi sig in a way that was later removed right when
they started having withdrawals. So, you know, smart contract
controlled. Yeah, The the the the problem
was that like, you know, the, you had the separation between
the, you know, the beacon chain and the kind of the regulation
the chain, right. And so the beacon chain, you
were not able to own a beacon chain validator with a smart
contract yet because the beacon chain did not, I think, like
support, support smart contracts like the technology didn't exist
like you only EO as could own could control these like beacon
chain validators. And so the best you could
actually do here was a kind of like MPC is secured like multi
SEC, right? You can do a smart contract like
that was added only later. Yeah.
And then so in the beginning, right, so it was basically that.
And then you had five validators was the initial set and you
know, people could just deposit their EFF, get staked EFF and
you know, it had a huge amount of traction.
I think probably the, I, I mean, my views, there was like 2 big
reasons for it. Maybe maybe it was a third
little bit of a reason, but I think the biggest reason was the
withdrawals, right? So where you basically you had
to stake you if and then you wouldn't be able to unstake it
until actual the merge happened, which you know, you didn't know
how long it was going to take, could be 3 months, six months, a
year, who knows, right? So of course, huge amount of
uncertainty and then no native delegation, right?
So Ethereum, I think I mean, my view, Ethereum is a kind of an
example where the staking design, the system staking
design was a bit of a failure in some way from the perspective
that like it was designed around the idea that people will run
their own validators at home and no in protocol delegation.
And I was just completely ignoring what people actually
want. And then Lido kind of built the
thing that people actually want, which is just a simple thing
where you can just take any amount.
So then I think Lido really right, We saw also even today,
right liquid taking on Ethereum, there's like way, way, way more
adoption than on any other chain I think for.
For these reasons, like, I mean, I've seen so many different
liquid staking protocols launched.
I mean, every chain has like 3 to five different liquid staking
protocols. Like even chains that have yet
to launch, right? Like this, there's like 3
different liquid staking protocols on Monad and that's
like 2 on mega eve and whatever, right?
Like every chain has them. And I'm not bullish on any of
them because you need like a very specific set of
circumstances to be true for liquid staking to repeat the
kind of success story that it has on here.
And you know, one big one was basically the fact that like if
you staked it was taken was like a one way door, right?
Like the merge ended up taking, you know, how long did it end up
taking? Two years, right.
Like I think it was like locked up for two years.
Yeah. Yeah, I think so.
Or maybe like maybe it was 18 months, right.
But like, I think the, the like most optimistic estimates were
like around 12 to 15 months, right?
So, you know, and like the conservative ones was OK, you
know, maybe it's like 2-3 years or even never, right.
So like you were taking, you were taking a risk.
And I mean, the risk wasn't was less of the problem was like the
discomfort from basically locking up your money for a long
time. And so the two solutions to that
were exchange staking. They offered you a derivative,
then you, you at least you could sell the stake position inside
the exchange, right. So maybe they could also issue
like the derivative on chain and you can also trade it etcetera.
But like exchange taking like we were very anti that because we
didn't want like exchanges to play like exchanges are already
the most valuable players in the crypto ecosystem at the time.
And we thought if they also control, you know, the the chain
itself, like, wow, that's really bad, right?
And so, and the other was staking in multiples of 32 EVE
by like, you know, maybe Eve was like one or two K or whatever at
the time. Maybe it was even higher, but
like it was like 50K plus to stake and you couldn't stake in
like lower increments. That was very bad also, right?
And so I mean, those two things were basically those were like
the golden ticket, right? In the sense like why a liquid
sticking fuel would do so well on Ethereum?
But like, like all liquid sticking ratios are super low on
like virtually every other chain other than EVE.
Like even Solana it has like 1% or 2% like liquid sticking
penetration. I think it's a bit higher now,
but. Yeah, it might have increased
like since I last checked. Yeah, but it's very small, like
it's not really comparable. I think that was like a good, I
mean like both are necessary because like otherwise
everything would be captured by exchanges and like and like a
good environment for Lido to launch into.
I would say yeah. Yeah, absolutely.
So when you think of Lido and the history of Lido, what are
the main, the main evolutions in the protocol and the main, the
main changes that have been enacted since the launch?
Yeah. I mean, I think, I mean the
launch itself is interesting. I would in in some sense I would
call it like the progmatic age, right.
Like the V1 is like all about pragmatism because as you were
saying, like yes, like there was a small number of not a radars
and the tokens were controlled by Moody sick.
And like it was all basically for technical reasons, right.
Like you couldn't do, you couldn't actually control like
we can change that as with a smart contract yet.
And like the baseline also at the time it was people that's
taking on exchanges like because people didn't want to lock up
their funds for two plus years, right?
They, you know, they wanted some liquidity at least, like all of
the big capital debt, right? And so I was like, is this
better? Is this better?
A, is this better than like staking on on an exchange?
And B, does it have a path to decentralization, right?
Like those were the two questions that that Lido was
asking itself. And like it made all of the the
right choices that that that were like very pragmatic choices
as well. That kind of you needed to
balance, you know, growth and, and like hell for Ethereum
because you don't, you didn't want the funds to end up on an
exchange and, and, and like path to decentralization.
I would say. So then when I think 2 years
later, like the merge happened and this allowed, you know,
lighter then also to that withdrawals to the protocol I
think took took maybe like a couple more months for that than
to happen. And I would say Lido has always
been on kind of 2 tracks. You know, 1 is basically, you
know, serving users and like making the best possible
product. And the other is about
decentralization. And it was always about
balancing these two things. And so the the first track thing
in a lot of ways is what about simplicity?
You know, like let just like click 1 button and like have me,
you know, stake my E for you, like give me give you the most
rewards, right? And the other is I think, you
know, also like integrations liquidity.
So you can actually with a token that you get in return, you can
actually go and and use it, right?
Like you can borrow against it in lending markets.
I think that really was the biggest thing like unlock
unlocking, making making like state state E on the beaten
chain, turning that into like a collateral asset like unlocking
the collateral value of that just made made it so much more
valuable. And this would later.
I think this this like track like of just like making the
best possible product for as many users as possible.
That would then I think motivate like V3 as well as we're going
to talk about in a minute. The other track was always about
decentralization. And so having like a really good
note operator sets, having like we always like growing the
number of node operators that stake is distributed across,
making sure it's Geo distributed, it's client
distributed. All of the node operators are
falling following like best practices around how to run
their staking setups and like, you know, make sure that
nobody's ever getting slashed. So it was a a big deal.
And then the other two are kind of making withdrawals
permissioners. So the idea that if you if you
actually hold any stake Eve, you can always go to the protocol
and you can redeem it for Eve and nobody can stop you, right.
That is that is a that is a big kind of North Star goal and one
step towards that is like going to be triggerable withdrawals.
So that's, you know, I think that was added in the last half
Rock. I think a theorem.
And the other one is dual governance, right?
So the idea, I mean, so first of all, you need you need a way for
like someone to programmatically trigger withdrawals from the
beacon chain in the sense that like the Notre Braider with the
fans are delegated to, you know, it's just getting ejected.
So they have no way to like stall it out or something.
So that was important. And the other was for people to
be able to withdraw without governance having any way to
stop that. And so that is the idea of dual
governance and the dual governance is an upcoming
upgrade to Lido where, you know, anywhere basically staked E4
does have a way to escalate and like freeze the the governance
system when they think like a contentious proposal is
happening. And that gives enough time for
everybody to withdraw. And so, you know, it's the, you
know, it's what this really gives you as a state guys, you
can always withdraw like that. Nothing can happen in governance
really like as long as you assume that like a small number
of parties is paying attention to act in time and then the
protocol can be frozen and like everybody can withdraw their
money. And so that that would then
basically make withdrawals entirely permissionless, which
which is a huge deal. Yeah, because probably not all
listeners remember this or followed this back then, But for
a while, Lido was very controversial.
So I think there was different reasons for it, right?
One was that Lido ended up getting very big, getting up to
about a third of all the EVE stake was in Lido.
And so of course people are like, oh, if there's more than
1/3 then. And then I think the other big
concern right here was that you had the LDO token, which the
governance token of Lido protocol.
And so you of course had like, oh, well, if now we have all
this eve that's kind of, you know, controlled by the LDO
token. And then, you know, maybe the
LDO token or they could like do something to, I don't know,
control the protocol extract value.
So of course that was never really never a risk I would say
in the sense that it wasn't the Lido philosophy or values or
goals. And I think Lido is very
conscious, right of these concerns, right.
So I think then the dual governance kind of.
Yeah, I mean it, I wouldn't say that it it wasn't a risk like I
think the risk never materialized like it's not, it's
not. So I mean.
It's not 0 risk. Yeah, these two things are
related, right? Like, I mean like the fact that
Lido control, it's 1/3 of ETH. I mean, what does control mean,
right? That's that's the big question.
And so the, the reality was that ADO could really exert some
amount of control like over the, over the stake, right?
Like it couldn't really control like the hundreds of node
operators that the stake is distributed to.
But it could with some reason, like it could, for example,
prevent people from withdrawing at the time.
Like if that's if that's a proposal that like you want to
make and that passes like the vote on chain.
And so it's really like the question is, how do you fix
those holes, right? And like a very big part is like
kind of neutering the ability for IDO to make any decisions
that would actually be bad for users and bad for Ethereum.
And so I think then, you know, there's that that that like a
tech factor becomes closed. You know, that said, like even
people like on the lighter side, or I mean, there were many
people. This was a thing that the
community was very divided watch right, like because even like
many people who weren't working online or were in favor of like
not self limiting the growth. And the reason was that the
other, you know, the alternative, like self capping
was also seen as risky. Like it had its own risks,
right? And that was the idea that if
the market really is like, if the market for staking
derivatives really is we're not take oil or we're not take most.
And if like the good guys basically like save cap and like
the bad guys don't, then you just end up losing, you know,
the entire market, right? And so that was I think a big
kind of rationale at the time. And I think we're like fortunate
that it didn't play out this way, but I don't think it was a
given, right? I think we we ended up seeing
that like the demand side of the market ended up fragmenting more
than than we thought. And then that led to like a
basically like a fragmentation on the supply side as well which
we will we can get into. I know.
Do you want to talk about institutional staking or Lido
V3? Maybe we go to Lido V3 first?
Yeah, we go to V3 first. There's one more thing on like I
have on decentralization, which is the other big North star.
There's like, you know, having a good node aware set, having
permission of withdrawals and the the 3rd and like final one
is having permissionless node operation.
So not just the ability for people like for stakers to join
and leave like permissionlessly, but also for note operators to
do the same thing. And you know that that is
basically like happening also in major ways as to community
staking module that made, you know, sticking permissionless
and it's slow. It's it's like slowly being
scaled up. There's also like DVT
distributed technology module. Just the idea that you have, if
you have, you know, let's say like you know, you have like a
multi sig of five and you have like 3 notabators in that set
who are either curated IE like secured by reputation or like
CSM validators, IE secured by a bond.
Then you can just add two more, right?
And they, you know, they can't control the validator, right?
Like they can, you know, it's like another way to like make it
so that people can join permissionlessly, maybe with
like an even lower bond or secured by like a smaller amount
of reputation. But yeah, so just the idea that
like you can make the protocol more permissionless over time.
And also the way that like stake is routed across these modules
becomes basically like more and more automated over time.
Yeah. So I was saying before 1 staking
derivative didn't end up winning, you know, didn't end up
growing, you know, to to like the majority of the market.
And that was because it turned out that, you know, there were,
you know, at the time staking was seen as like, well, one
staking set up is like the same as every other staking set up,
you know, So then liquidity became a real differentiator
and, and integrations and, and, and, and that kind of stuff.
But as it turned out, you basically saw two big trends.
And one was the rise of re staking.
So the idea that like people were were staking like they
wanted to like stake the eve on the beating chain, but also then
they kind of stake that very that again and some set up where
they were maybe earning extra rewards and Lado did not
participate in that. It was like seen as not in, you
know, in the values of the protocol to do that to kind of
take, you know, to rehypothecate people's stake.
And you know, it basically gave rise to this new to new
protocols that that did that, that ended up like taking more
risk, but also paying more rewards.
And I mean mostly or like not mostly, but like it was entirely
fueled by kind of inorganic growth incentives.
So we were, we're talking about liquidity mining in the
beginning, right? It's just like all liquidity
mining in the sense that there's nobody actually using, you know,
actually using that like that stake and is actually paying any
like organic rewards. And there's also no slashing or
anything. So, you know, it's just purely
like building the supply side, paying people points and
ultimately like Aglaya tokens, for example.
And you know, that ended up soaking up a lot of ETH and a
lot that this was like a big use case that that lighter didn't
serve. And the other was like more
institutional forms of staking. So I think as, as like more and
more like institutional players decided to come and do crypto,
What he ended up seeing was they had different often times, you
know, either like risk management, like more internal
based or like more regulatory, IE like external based kind of
constraints and desires about what they wanted to do.
So for example, if you if you have a, if you have a constraint
like you need to know the Noto writer you're delegating to and
you actually need to have like a pen on paper, like actual legal
contract with them, then that was a thing that like Lido did
not surf you at the time, right? Aside from of course running,
you know, Lida validators and we started using N as a few or so
while ago now, but I think there was one very elegant design was
to stake wise design and to stake wise design basically
allowed you to have different vaults.
So you know, we can have, we could have a public vault that
people Safeway for. We could have a vault just for a
particular customer where like no other assets would be.
And then of course, you can have whatever fee agreement you
wanted, you know, you could decide or different maybe DVT
for one or not like you could have one validate or different
sets. It was extremely flexible.
But then the thing that stake was also allowed you to do was
that all of these different vaults and there was no fee from
the protocol on any of these vaults, but it it would allow.
People to then still mint a liquid second token.
Or as if that was shared across all the vaults and then, you
know, for example, Eigen layer added OSC, right?
So then you could say, OK, I can participate in Eigen layer,
right? Or I could do you know, we we
have to small now where you can do leverage staking, right?
Where you can basically take the OSC, put it in all they bore
against it and loop it. So like that I think was a very,
very elegant design and that I am, I think, also inspired.
Yes, absolutely. I saw the same way that liquid
staking had been around like 2-3 years at least before Lido
launched. Like the idea of vaults I think
is like is, is similar. I think a lot of people in, in
the like liquid staking space or staking space in general, you
know, have been having like the same idea or like, you know,
roughly the same idea, but it wasn't the same priority or like
timing. I think for everyone.
I think that stake wise, you know, I think they definitely
have, you know, great products and you know, it's it's a very
strong, I would say inspiration for for lighter V3 because so if
you, if the, you know, if we kind of from talking about
restaking and talking about institutional, you know, demand,
like the problem here was like in both cases that the staking
set up that Lydo gave you was not flexible enough, right?
It was opinionated, right? So it was not putting your money
in re staking. You were getting the same
returns as everybody else. You did not were not able to
choose who we are not the red eyes and like what mainly the
release they use and if they use DVT or not, right.
So it was all like one big pool. And so I think the idea of what
then to kind of put that like on top of what lighter already has
is a very kind of organic one in in the sense that you when you
have that, you've already explained it perfectly, right.
Like a word is just, you know, it's the idea to like create
your own staking setup with your own valid with your own not
abraders and and then have the ability to mint the liquid
sticking token, like in our case, stake Eve against that
with a like with a collateral ratio that that is based on, on
that vaults risk profile. And I mean, I would say that
there's a big difference still between like vaults and Lido and
vaults in stake wise. And it's just like staked EVE is
like just like 1000 times or whatever, like more liquid,
right? Like that is that is like a big
difference, right? And so the ability to to be able
to min the most liquid and most integrated steak and derivative
that that is that does make it like a much better product.
Yeah, absolutely. Of course.
I think where Steak EEF is absolutely no doubt by far
number one right, is in terms of liquidity for Steak EEF and
integrations in, you know, all kinds of places, but you know, I
guess especially default protocols and yeah, for sure.
So that that is something where it's a very compelling offering.
So now basically what that means is anyone or like, can you
explain to us how it works? Can, can now anyone go and
create a vault or is there some kind of like commissioning or,
you know, only certain parties or how, how does that thing
work? And, and then also how does it
work with the, the collateral ratio, right?
Because in the end, in the end, right, one of the challenges is
that in Lido, you say like, OK, we kind of managed to risk by,
you know, through all these ways, right, through the
distribution, through vetting node operators at at least for
the curated set. And now if people do their own
vault, you don't really have control anymore about what they
do. Yeah.
So anybody can create a vault. Like a vault is just a kind of
immutable primitive. A vault has, you know, someone
who can put like the stake into it.
It has a note operator that the stake is then going out to and
being staked with. And you can also have a curator.
So very similar to like how it works maybe on like more four
and like, you know, the new like generation of landing markets,
you know, a void kind of a kind of a curator that's like setting
like the parameters of the void and like you.
Can have one or or or or multiple.
Node operators I think, I think 1.
So did you ask about node operators or curators?
Node Node operators. OK, yeah, I think you can have
several. I think it's like, you know, up
to you. So what?
What a void doesn't have by default is the ability to mint
state DEF right? So that that is you need you're
basically starting with like 0% collateral ratio like you're,
you know, you are. Your void is like able to mean
like 0% worth like stake if against your the collateral
that's that's in the void. Or maybe it's starting from some
low ratio. I don't know like the exact
details, but you know you can. You basically need like
permission from the ladder dial in order to be able to mint the
stake Eve. I think it's working the same
way in in in stake wise as well. I think all everyone can mint OS
even stake wise now, but I think by default it has.
It doesn't allow you to mint the entire amount, but yeah.
That's exactly what I mean. They said like a very, yeah,
they said like a very conservative ratio.
And I think that's that's how it would work as well, probably in
in Lido. Yeah.
So by default and say what I think every vault can mean, I
think 95% and then some vaults, I think it's actually just of
course one vault. And the Genesis vault, they have
some special like, OK, it has to get to a certain size, it has to
have some survives token collateral, has to go through
governance and then they can do 100%.
Yeah. And I'm the the way that I would
like encourage people to think about that is like modulus in
Lido, like right now stake is coming in and then there's a
thing that called a stakey router and it's like giving
basically, you know, the right to like mint stake eve against
that Eve two different modulus, right.
And like that distribution function today is, is permission
because it's necessary for risk management like that.
They are, we have ideas for like automating that in the future,
kind of like moving to kind of a policy based type of governance.
Like governance only sets the policy, but the policy isn't
like implemented automatically. And you know, this is another,
this isn't technically a module, but it's like, it's like a
module in the sense that like the, the Dow sets, you know,
risk limits basically for, for vaults, like vaults as a whole.
And then can set like, you know what, what types of vaults like
you can get, like what type of collateral ratio, like what is
their, their minting abilities? So that's very important.
So that basically will mean like someone creates a vault.
I don't know. Let's say of course 1 creates a
vault or someone else gets a vault and then you want to allow
this vault to mint OSF against it.
You will go through the Light of Governance process to get vaults
whitelisted for this. Or approved.
I mean, in in later Dow, we're not fans of like making these
like very like low level decisions.
So I think it more likely there's like a governance vote
to unlock a certain amount of like overall wall liquidity to
min stake. If maybe like, let's say like
initially like 2% and then 5% and then 10% right of all stake
outstanding. And there's like a committee,
like a risk management committee that is basically then charged
with like allocating that that capacity to different wards.
So I mean, you know, if you, you know, if that would be your
touch point then as well. Like if you're a correspondent,
you're launching a ward. And what's the timeline on the
Lido V3 roll out and are there different phases to it?
So yeah, we are in a in a pre launch phase right now.
So I mean, right now there's like a kind of simulated way to
do vaults. It's like not technically the
vault, but it's like kind of like a trying to simulate that
through like off chain refunds and like giving you some ability
to do custom setups for like the actual V3.
And like we're like also working with like many different parties
right now, basically like and getting them ready to to kind of
adopt it when it goes live. And like the actual V3 launch is
going to be in summer 2025. S in in in maybe like 1/4.
Cool. That's very exciting.
Yeah. And I guess maybe that ties in a
little bit with the institutional stake inside,
right. I mean, I think that ties
certainly the whole thing about, hey, I want to have a contract
with my node operator, I want to have an SLA like all of that
stuff of course becomes possible.
Then I guess the other big thing is ETFs or kind of sort of
products that are traded in their traditional financial
world, but that represent underlying safety theorem where
I think redemption is a big issue, right?
So they're basically they generally have to serve
redemptions like you know, T + 1.
So someone says I want to get my EF out, they have to send it the
next day. But then that's a problem,
right, because the E form bonding period is much longer
than that. So then depending.
On the size of the exit queue. Yeah, exactly.
Yeah, I mean, as you're saying, right, Like so first of all,
between like ET, like non staking ETFs and staking ETFs
first, like the first thing to understand about ETFs in general
is like they will basically all compete on price.
Like ETFs is like a, you know, an ETF is like a commodity and
like commodities compete on price.
Like Brent plays some role, but you know, not that much and so.
That's why a staking ETFs are going to have a big advantage
over non staking ETS just because they can, you know, like
a, a, a non staking ETF like actually needs to charge you
like a fee, whereas a staking ETF they can actually pay you
right from the rewards, like your balance is still going to
grow and they can just like charge a much more like
invisible kind of fee from that. And so I think it's like it is
actually a very good and like attractive product.
And within the set of staking ETFs, you're basically competing
on how much you can stake. Like you, you want you, you're
going to maximize like your returns by staking as much as
possible. And that in turn is controlled
by the size of the door or like how many doors there are, right?
And so if you're if because you need to be able to, as you were
saying, exactly right, like you need to be able to serve the
redemption requests when they come in.
And when you, when you use like native staking, right, just like
go through, you know, just put your money directly on the TM
beacon chain. You basically have like one
door, right? Like the door is the exit queue
from the beacon chain back to the execution layer.
And so that door, you know, you don't really know how big it is.
Like it, it's, it's like, it's sometimes it's like, you know,
can move a lot of money through, but then other times it's
clocked. And very often it will clock at
the exact time when you like, don't you, you, you need it to
like not clock, right? Because everybody wants out at
the same time for the same reasons.
And So what staking the derivatives give you is a second
door next to the smaller like official door.
That's like a back door, right? And so that's the idea of, you
know, you can't just, you can't just unstake your EF to the
beacon chain. You can also sell your stake the
EF to willing buy us in the secondary market.
And those buyers, especially if the stake EF is trading at a
discount, they have all the reason to wait to hold it on the
balance sheet and then maybe redeem it like a week later or
like 2 weeks later. Like that's like as a near risk
free arbitrage trade for them. And so you can expect that the
like size of the kind of second door, the like secondary market
is a is going to be a really good way to kind of exit your
like expand the total amount of exit liquidity that these ETFs
have available and just allow them to stake more and thus
charge like much lower fees. And so that's why using the
exact riot staking setup is that is that is, I think you know,
that probably is going to be like deciding between winning
and losing for these ETFs. Yeah, absolutely.
Absolutely Anything else you want to talk about with regards
to institutional staking? I mean, we are, we are in
advanced stages of discussion, I would say with all of the major
ETF issuers. And yeah, I think it's, you
know, it's going to happen like at some point, I think Lido is
in a really good position because nobody else can offer
like the size of the door that that stake Leaf can.
Yeah, absolutely. So maybe we can do a final topic
a little bit and talk a bit about Ethereum more generally.
I think there has been perception over, well, I would
say state of crisis, right, a bit in Ethereum.
I mean, for one, you've had Ethereum actually perform pretty
badly as a asset for a while, right?
So it's out massively underperformed Bitcoin massively
underperformed Solana for a few years now you've had the sort of
crisis big questions around all the L twos and is this value
really go to Ethereum and what makes Ethereum valuable?
And what is Ethereum in the 1st place?
Is it the world computer or is it this kind of some sort of
digital gold like money, a bit like Bitcoin and like?
And then how should the Ethereum Foundation work?
And. And now you had the leadership
changes at the Ethereum Foundation with your executive
directors. And so actually speaking with a
lot of VCs in the last months, I felt there was a really
widespread bearishness on Ethereum.
How do you feel about things? Yeah, I think I tend to like not
get so overhyped and things are going well and like mostly focus
always on like the negatives and when when everybody is like
dunking on a thing, I try to see more of it's positive.
So I think I think I'm more from my character.
I'm more of a like flatline, you know, in that sense, like
emotionally. And I mean, I think in this, in
this particular case, it's like a positive because I, I think
the theorem has never been like, like that downbeat.
Like, I think it's like people were, were saying a very often,
I think like price performance comes first and then people are
trying to backfill like a narrative for why has it, has it
done poorly? I think this is there's probably
some some effect here like that, well, that's like some something
is performing poorly and then people are making up a narrative
for why that's the case. And that narrative is very
convincing to other people. But then also seller who
reinforced the narrative. When you just look purely at the
fundamentals, then like yes, like Solano has caught up to
Ethereum in some of the metrics that matter, but it was also
leading in like many metrics that matter.
In your view, what is? I don't know if you have like I
know one or two or maybe Max 3 metrics that you think are most
important to look at. What?
What are they? Well, I think it's like number
of like number of VC backed protocols launched like on
Solana versus like Ethereum plus layer 2.
So I think would be my this, this is a very big one.
I think TBL is another big one. That one's hard to fake.
Like those two, those two would be pretty big.
And then maybe deck something like decks trading volume maybe
because I most care about like finance financial.
Activities. Cases, yeah.
The thing is like when you, I think people are like looking
for, I mean, I'm coming from the MUV space of course.
And so and like, I mean, so I know that like in Ethereum we
see actually like MEV, like MEV becomes basically protocol
revenue as like proposers option of the right to order
transactions in the block. We, we see that as like a,
that's almost like a negative indicator for like how well the
chain is doing. Like if that number is very
high, it means there's a lot of MEV, it means a lot of users and
like market makers and stuff are like are basically getting the
their money extracted from them. And it's, it's, it's a super bad
UX and it's, you know, going to make people like not come back,
etcetera. And so we have worked very hard
for like many years to build an MVV supply chain where people
don't get front run, they don't suffer like there were.
They don't want sandwich, they don't get like they don't pay
like this, their Max slippage tolerances and for apps to
build, if we have the tools and the knowledge etcetera to build,
you know, MEV resistant applications and stuff.
And then you're like in Solana in a lot of ways.
It's like totally like the wide W like Ethereum, like four or
five years ago, where like every user is getting sandwiched in
like almost every trade. Everybody's paying their Max
slippage. And you combine that with these
like coins and like use cases that are extremely speculative,
right? Like meme coins where, you know,
if I have a very short time horizon, I know I'm buying this
thing to sell it like today or tomorrow.
I don't care about as much about my execution, right?
So in this case, I'm fine paying like a 5% transaction fee or
like a 10% transaction fee, even in some cases because it's so
volatile, you know, and my time horizon is so short.
And so, and I think when you look at that, it's it's just
like like extremely, you know, first it's bad because it's
literally like money taken from users, but it's also extremely
unsustainable because a chain that has this level of MEV
extraction is, you know, never going to be able to scale to
like use cases beyond the ultra like short term.
So I'm not saying like the problem won't get solved because
I think it will like the, we know the Jito team pretty well.
Like they are very like they are aware of all of the problems and
they're like very sensible and smart.
But I mean, also like the revenue numbers that like Solana
stickers and like Gee do I'm making are like they're not good
and and they're also not sustainable.
Yeah, for sure. I think that's definitely one
place where here is far ahead of Solana and where I think they're
still a ton of work to do to make the whole transaction
supply chain and MEV more kind of, I don't know, reasonably
managed. Yeah, I agree with that.
And I think the the maturity of the D5 ecosystems also something
where I think Ethereum is still far ahead.
Yeah, I mean, that's not even. I mean, it's just like by, I
don't know, buying something on Solana the other week and like
the I mean, the exchanges are on like a different level of
quality, but like not in a good way.
I mean, there's like, you know, I'm, I'm very used to like
Salat, like using Kalstroke, for example, like only here.
I'm like disclosure. I'm I'm an investor, but just
like I'm also like a user and like the idea that, you know, I
can have multiple solvers compete to give me the best
execution. My trade siamed protected, I can
pay my gas fees and like the output like all of that stuff
right, like it just doesn't exist right on Solana and it's
like not a good experience. Like I know people that say they
love the UX and I think the wallets are, you know, the like
Phantom wallet is a, is a, is a good UX, but it's just like in
terms of just the basic, just like getting the basics of Defy
right beyond new crunch trading, I think they still have like
some ways to catch up and, and framed a different way, like I
think the maturity of the Defy ecosystem, like All in all,
Ethiom is still pretty far ahead.
Yeah, I agree with that. But to come sort of to this
point about, you know, the sentiment about Ethereum and the
performance as an asset, what do you think it will take for this
to turn around and for Ethereum to again be something that, you
know, grows up and creates excitement and you feel there's
momentum and people like bullish about it and they want to buy
more of it. And like, whoa, whoa, what does
it take? What does?
It take, I mean, so I think the same way that like narratives to
reinforce like snowball and reinforce themselves on the
downward, they do so on the upward as well.
So I mean, the way that you would expect us to turn around
is like people are really, you know, they're really just like
fed up with Ethereum and you know, that's like bad news can't
really face them anymore because all they expect is like bad
news, right? And so it takes like very little
good news to like make people slightly more positive at some
point and then like, you know, you can have a kind of snowball
in the other direction. I think that's very often like
how these things work. So you can try to make up like,
OK, we need like fundamental changes, but very often days are
like a cyclicality to these things that shouldn't be
ignored. I think fundamentally like the
leadership changes at the EF, I think that that was good.
Like hands down, I think that Ethereum has been a like, I
mean, if you have this research LED in the sense that like it
has very long road maps and like things are in discussion for a
very long time and it's trying to have a very decentralized
development process. It's also research LED in the
sense that like the court apps and like the EF researchers are,
they are the ones driving the road map.
And for a very long time, like industry involvement in that
road map was seen as not desired, right?
And like, you know, you can have this at a time when you're the
only chain, but when you're competing with other chain
ecosystems for the same developers, at some point you
need to start paying more attention to the ecosystem.
And like, I mean the D Phi people can tell you like
everybody building in D Phi can tell you like at least one very
bad experience about like working with AEF in the sense
that like they have been there. Either they are like very
dismissive of like the thing you're building in the sense
that like I love italic, but also like his word carries a lot
of weight. And so when he's like maybe
writing that he doesn't like defy or he thinks that like, you
know, crypto shouldn't be used for that and he hopes that there
would be other use cases, etcetera.
Like it, you know, it feels very dismissive for like the people
working on that, for example, right or another is like when
they have ideas for all the protocols should be improved
because they, you know, it's their users, right?
They know, you know what they get like a million support
tickets for every year and like they know what they suffer with.
I mean, then and that you try to turn that like into an EIP and
you're already meeting a little resistance in the sense that
like, are you trying to like Co-op the protocol?
You're trying to take over the protocol.
Like, I mean that those are like very bad experiences.
And I think those are things where I think you have now the
full like recognition that like, hey, that hasn't been maybe so
good. And like, what can we do to
change that? Like there's a new energy, I
would say, and like people getting like the right people
getting promoted into the right positions, like including the
two new EDS and like especially Tomas from Nethermind, he has
built and like a very like large and successful organization in
in nether mine. And they are very commercially
minded, right? Like it's amazing how they have
built a successful, very big, successful company on the back
of creating an Ethereum client, right, Which really you
shouldn't be able to like commercialize that, right?
But they have managed to like they're not making money through
the client, but like they have built everything around that.
And to me that's like an extremely good sign.
Like he has extremely deep roots in industry and knows all of the
builders. And so I think you, you're
seeing a new kind of energy around making Ethereum more
commercially open and commercially minded.
And I think that is if there was one thing that I would change,
then it would have been that for sure.
And so and we're seeing that. So that's very positive for me.
I agree. I agree.
No, I think I think that's, that's probably one of the big
thing is also just a sense of like, you know, core development
moves a bit faster, more programmatic, you know, tries to
I think I think some degree of faster scaling.
I think it's an important one too.
That is the other thing, yeah. I mean, if you listen to to
apps, then yeah, you would have scaled the layer one, right?
Like so there's a kind of related, but maybe it's still
worth talking about separately. But I think in terms of road
map, like I think there must be an that there is now an
understanding that like you shouldn't give up on the layer
one. Like I mean, a lot of what makes
greatest incentive for roll ups to build on Ethereum is the
quality of the layer one. It's it's speed, it's finality,
you know, it's DA costs and transaction costs.
So we need OP codes for Zika verification like stuff like
that, right. And so like there's a bit more
of the understanding where yes, we want to have a roll up
central broad map. That means roll ups are a big
group of customers. So let's think about what they
need holistically and a lot of what they need, we can only give
them by making the layer one better.
And so I think you're seeing a real revitalization also of that
conversation. And, and so I think anybody
who's like buying Ethereum is also underwriting the, they are
underwriting the thesis that like these two, like the people
who, who, who want to push for those two things can basically,
you know, breakthrough, like the resistance and like, you know, a
lot of the entrenched like interests, like inside these
processes and like this bureaucracy that has build up,
right. Because I hear I'm in a very
like procedural kind of community where and, and like
decision making in a lot of places has historically grown to
be very decentralized, for better or worse.
And you know, in, in some areas you have like, there's the
understanding that like, well, this, like this group of people
maybe, or like, you know what I mean, the core core developers
are like the main example, right?
Like you have the client teams and like client teams decide
what goes into into the fork. And that's, you know, maybe that
is like one of the very big assumption that like needs to be
challenged in the sense that like often, you know, you know,
quite a lot of us do the implementing, but maybe they
shouldn't, you know, they shouldn't be the decision makers
for what actually goes into it. Because like Ethereum is not the
type of protocol where you can have, you can be like an
extremely talented engineer, but you can also still have that
kind of like strategic vision and like keep the old protocol
in your head and like know what it needs like at what time.
Like that at least like the set of stakeholders who get to make
decision needs to be like expanded.
Cool. I think that's a great note to
end on. And I'm also excited to see sort
of what this new energy will bring to Ethereum.
So thanks so much for coming on House.
We really enjoyed this conversation.
Thanks, Brian. It was really fun.
Thank you.