1 00:00:00,120 --> 00:00:03,600 We were hesitant to acknowledge the as it as it grew. 2 00:00:03,600 --> 00:00:07,120 We wanted to promote home staking as the best solution. 3 00:00:07,440 --> 00:00:11,240 Liquid staking a whole lot more competitive than running a 4 00:00:11,240 --> 00:00:13,200 validator where you don't get any capital back. 5 00:00:13,200 --> 00:00:17,840 You can't reuse that capital and and like add add risk to it to 6 00:00:17,840 --> 00:00:20,600 get extra reward. One of the things that we don't 7 00:00:20,600 --> 00:00:24,200 want in staking is colluding operators. 8 00:00:24,360 --> 00:00:28,720 We don't want Coinbase and Kraken to work together, we want 9 00:00:28,720 --> 00:00:32,960 them to be adversarial. 30% of the steak eat is in Lido. 10 00:00:33,120 --> 00:00:37,440 That means that they are a sort of a systemic risk in Ethereum. 11 00:00:37,560 --> 00:00:42,520 Can we slow down the amount of steak coming in knowing that the 12 00:00:42,520 --> 00:00:45,360 majority of this is not the most valuable form of staking? 13 00:00:45,640 --> 00:00:49,560 There are changes being proposed to sort of favor home stakers 14 00:00:49,560 --> 00:00:52,080 and favor more decentralized forms of staking. 15 00:00:52,320 --> 00:00:54,760 Welcome to Epicentre, the show which talks about the 16 00:00:54,760 --> 00:00:57,600 technologies, projects and people driving decentralization 17 00:00:57,600 --> 00:01:00,640 and the blockchain revolution. I'm Frederica ANZ and today I'm 18 00:01:00,640 --> 00:01:04,920 speaking with Supervis and Nick so who are the Co founder and 19 00:01:04,920 --> 00:01:09,680 executive director respectively of the Reddit community, East 20 00:01:09,680 --> 00:01:13,960 Staker. So before we talk about Reddit 21 00:01:14,040 --> 00:01:17,800 and staking and everything in between, let me tell you about 22 00:01:17,800 --> 00:01:21,600 our sponsors this week. This episode is brought to you 23 00:01:21,600 --> 00:01:24,320 by Gnosis. Gnosis builds decentralized 24 00:01:24,320 --> 00:01:26,760 infrastructure for the Ethereum ecosystem. 25 00:01:27,320 --> 00:01:31,560 With a rich history dating back to 2015 and products like Safe 26 00:01:31,800 --> 00:01:36,280 Cow Swap or Gnosis Chain, Gnosis combines needs driven 27 00:01:36,280 --> 00:01:39,440 development with deep technical expertise. 28 00:01:40,200 --> 00:01:43,880 This year marks the launch of Gnosis Pay, the world's first 29 00:01:43,880 --> 00:01:47,800 decentralized payment network. With a Gnosis card, you can 30 00:01:47,800 --> 00:01:52,200 spend self custody crypto at any Visa accepting merchant around 31 00:01:52,200 --> 00:01:54,840 the world. If you're an individual looking 32 00:01:54,840 --> 00:01:58,360 to live more on chain or a business looking to white label 33 00:01:58,360 --> 00:02:03,240 the stack, visit gnosispay.com. There are lots of ways you can 34 00:02:03,240 --> 00:02:06,880 join the Gnosis journey. Drop in the Gnosis Dow 35 00:02:06,880 --> 00:02:09,880 governance form. Become a Gnosis validator with a 36 00:02:09,880 --> 00:02:14,600 single GNO token and low cost hardware, or deploy your product 37 00:02:14,680 --> 00:02:18,280 on the EVM compatible and highly decentralized Gnosis chain. 38 00:02:19,320 --> 00:02:22,240 Get started today at gnosis dot IO. 39 00:02:23,600 --> 00:02:27,440 Chorus One is one of the biggest node operators globally and help 40 00:02:27,440 --> 00:02:31,520 you stake your tokens on 45 plus networks like Ethereum, Cosmos, 41 00:02:31,960 --> 00:02:36,440 Celestia and DYDX. More than 100,000 delegators 42 00:02:36,440 --> 00:02:39,960 stake with Chorus One, including institutions like BIT, Go and 43 00:02:39,960 --> 00:02:42,720 Ledger. Staking with Chorus One not only 44 00:02:42,720 --> 00:02:47,440 gets you the highest years, but also the most robust security 45 00:02:47,440 --> 00:02:50,560 practices and infrastructure that are usually exclusive for 46 00:02:50,560 --> 00:02:53,640 institutions. You can stake directly to Chorus 47 00:02:53,640 --> 00:02:56,640 One's public note from your wallet, set up a white table 48 00:02:56,640 --> 00:03:00,600 note, or use the recently launched product Opus to stake 49 00:03:00,640 --> 00:03:03,440 up to 8000 ETH in a single transaction. 50 00:03:04,160 --> 00:03:07,840 You can even offer high yield staking to your own customers 51 00:03:08,160 --> 00:03:10,760 using their API. Your assets always remain in 52 00:03:10,760 --> 00:03:13,360 your custody, so you can have complete Peace of Mind. 53 00:03:13,560 --> 00:03:18,080 Start taking today at Chorus .1 next. 54 00:03:18,080 --> 00:03:21,640 So in superfiz, it's a an it's an absolute pleasure to have 55 00:03:21,640 --> 00:03:24,600 both of you on. It's kind of we've haven't, we 56 00:03:24,600 --> 00:03:27,320 haven't had a staking episode in a while. 57 00:03:27,520 --> 00:03:32,560 So tell me about yourselves. Hey, so I'm superfiz. 58 00:03:33,320 --> 00:03:39,120 I have been an Ethereum since the Olympic test net, actually 59 00:03:39,120 --> 00:03:45,280 since before that since I read Vitalik's paper introduced smart 60 00:03:45,280 --> 00:03:47,880 contracts to me. Totally didn't understand it, 61 00:03:47,880 --> 00:03:51,720 but I had this kind of gut feeling and I've just been 62 00:03:51,720 --> 00:03:53,800 curious about Ethereum since then. 63 00:03:54,480 --> 00:03:58,720 Around 2018 I got interested in proof of stake. 64 00:03:59,120 --> 00:04:03,920 That was about the time that the first model got discarded where 65 00:04:03,920 --> 00:04:10,040 it was stake 1500 ETH and it was, it was totally reworked and 66 00:04:10,840 --> 00:04:15,320 I quit my job and I was like, I'm going to promote staking. 67 00:04:15,320 --> 00:04:17,000 Like it's the thing that I want to do. 68 00:04:17,000 --> 00:04:23,520 I, I felt passionate about it. And so probably since 2018, I 69 00:04:23,520 --> 00:04:28,640 have been just obsessed with promoting proof of stake on 70 00:04:28,640 --> 00:04:30,080 Ethereum. So that's me. 71 00:04:31,200 --> 00:04:32,920 What was your job before you quit it? 72 00:04:34,160 --> 00:04:38,280 So I was a school psychologist and a school counselor. 73 00:04:39,000 --> 00:04:40,320 I worked with kids and I loved it. 74 00:04:40,760 --> 00:04:43,840 But. That's actually, that's actually 75 00:04:43,840 --> 00:04:46,240 weirdly in tune with kind of what you do for the Ethereum 76 00:04:46,240 --> 00:04:48,080 ecosystem too. It's kind of like. 77 00:04:48,560 --> 00:04:51,960 I didn't think so at first. Yeah, at first I, I was like, 78 00:04:52,040 --> 00:04:55,760 I'm not, I'm not, you know, I got AC in intuitive computer 79 00:04:55,760 --> 00:05:00,080 science. I, I, I've been a nerd my entire 80 00:05:00,080 --> 00:05:04,360 life and I've always been into technology at computers. 81 00:05:05,320 --> 00:05:08,880 But yeah, I, I took psychology classes because they were easy 82 00:05:09,080 --> 00:05:12,000 and easy for me. They're not, you know, easy for 83 00:05:12,000 --> 00:05:13,680 everyone. But they were it, it was in tune 84 00:05:13,680 --> 00:05:17,200 with what I know. And so I did this career working 85 00:05:17,200 --> 00:05:20,880 with kids and I, I was a guidance counselor. 86 00:05:20,880 --> 00:05:24,960 And I do, I see a lot of parallels now between guiding 87 00:05:24,960 --> 00:05:27,600 community, working with people, encouraging people, being 88 00:05:27,600 --> 00:05:32,160 supportive and sort of seeing the path forward. 89 00:05:32,160 --> 00:05:34,680 So yeah, there there are a lot of a lot of beneficial 90 00:05:34,680 --> 00:05:37,520 parallels. Everyone can't be a developer. 91 00:05:38,240 --> 00:05:41,120 Yeah, think of the others. What would happen if everyone 92 00:05:41,120 --> 00:05:43,760 were to use gas? It's like it's like it's very 93 00:05:43,760 --> 00:05:47,040 parallel to kind of like absolutely, yeah, no. 94 00:05:47,040 --> 00:05:51,640 And I think kind of the the ecosystem absolutely needs many, 95 00:05:51,960 --> 00:05:55,280 many non defs. May need non defs actually. 96 00:05:55,280 --> 00:06:02,280 But yeah, what about Unix O? So I was like very, very loosely 97 00:06:02,280 --> 00:06:07,040 into crypto before I ever heard of staking, before staking ever 98 00:06:07,040 --> 00:06:09,840 launched. But at some point I was just 99 00:06:09,840 --> 00:06:14,360 buying Ethereum and I kept seeing this #32 throwing around 100 00:06:14,360 --> 00:06:15,480 and I was like, what is this number? 101 00:06:15,480 --> 00:06:16,800 I'm very curious about this number. 102 00:06:17,080 --> 00:06:20,400 And mostly I saw it from from supervise because we were both 103 00:06:20,400 --> 00:06:23,640 part of the E finance community, which is another Ethereum 104 00:06:23,640 --> 00:06:28,600 community on, on Reddit. And so I got, I learned how to 105 00:06:28,600 --> 00:06:32,680 stake myself. And at some point I started 106 00:06:32,680 --> 00:06:35,560 answering a lot of questions in the East Acre subreddit And 107 00:06:35,560 --> 00:06:38,440 super Fizz reached out to me and was like, you're very helpful. 108 00:06:38,440 --> 00:06:41,320 Can you can, can we, can we get you to help more? 109 00:06:41,320 --> 00:06:45,600 Can we get you more involved? And so I got involved through E 110 00:06:45,600 --> 00:06:51,440 acre and I used to be an an an oceanographer and I actually 111 00:06:51,440 --> 00:06:55,480 left my job in oceanography because I was getting really 112 00:06:55,480 --> 00:06:58,480 into staking and really into this ecosystem and I wanted to 113 00:06:58,480 --> 00:07:02,160 throw myself in completely. If I could follow up on that, 114 00:07:02,320 --> 00:07:06,400 the I, I have always and to this day, and even in this this talk, 115 00:07:06,760 --> 00:07:09,560 Nixo answers things the way that I wish that I could. 116 00:07:09,800 --> 00:07:16,480 And so she even in Reddit, Twitter, wherever, you know, I 117 00:07:16,560 --> 00:07:18,200 answer and I'm satisfied with my answer. 118 00:07:18,200 --> 00:07:20,600 And then I read Nixo's answer. I'm like, damn, I wish I had 119 00:07:20,600 --> 00:07:24,640 said it that way. So I, the reason I'm so excited 120 00:07:24,640 --> 00:07:29,240 to promote and encourage her is because we're on the, on the 121 00:07:29,240 --> 00:07:32,920 same wavelength in so many ways, but she has an ability to say 122 00:07:32,920 --> 00:07:34,240 things better than I might have said them. 123 00:07:34,240 --> 00:07:38,840 So that's that's my excitement. That is such a wonderful 124 00:07:38,840 --> 00:07:41,560 compliment. I I really like that. 125 00:07:41,960 --> 00:07:45,840 So super first. So when, when you kind of quit 126 00:07:45,840 --> 00:07:50,520 your job as the school guidance counselor, how did you finance 127 00:07:50,520 --> 00:07:51,960 yourself? I mean, were you already very 128 00:07:51,960 --> 00:07:56,160 long either or kind of how, how, how did this kind of, I mean, 129 00:07:56,160 --> 00:07:58,040 obviously most people kind of have to make a living. 130 00:07:58,040 --> 00:08:03,520 So kind of promoting staking on Ethereum's probably not one of 131 00:08:03,520 --> 00:08:07,800 the jobs in the school guidance counselor's list of jobs that 132 00:08:07,800 --> 00:08:11,880 you recommend to students. So how, how, how did that play 133 00:08:11,880 --> 00:08:14,240 out? Yeah, that's interesting. 134 00:08:14,240 --> 00:08:17,520 And I don't think I've ever actually answered this before it 135 00:08:17,520 --> 00:08:22,080 it was crypto. I, I also held Bitcoin and ether 136 00:08:22,080 --> 00:08:29,320 and I had several dash master nodes or they were dark coin and 137 00:08:29,320 --> 00:08:34,559 Dash. And I, I really that year 138 00:08:34,559 --> 00:08:39,080 reached a point with my crypto investments and this is around 139 00:08:39,080 --> 00:08:45,120 2018, that I felt like my daily volatility was higher than my 140 00:08:45,120 --> 00:08:49,680 annual income. And that, that was just weird to 141 00:08:49,680 --> 00:08:53,520 me. I'm like, why am I doing, you 142 00:08:53,520 --> 00:08:55,520 know what? This, which I loved it. 143 00:08:55,520 --> 00:08:58,480 I did it for 15 years. It was very rewarding, but it 144 00:08:58,480 --> 00:09:03,480 wasn't financially rewarding. And I felt like I could, I could 145 00:09:03,480 --> 00:09:08,280 make a bigger impact in a better, you know, a bigger 146 00:09:08,280 --> 00:09:11,840 impact in the world through promoting staking, then 147 00:09:12,600 --> 00:09:16,840 continuing to do this, you know, really non financially rewarding 148 00:09:16,840 --> 00:09:19,800 thing. And since that time I've, I've, 149 00:09:19,800 --> 00:09:25,280 and I haven't had any, any jobs, but I've, I've had, you know, 150 00:09:25,280 --> 00:09:28,320 arrangements that, that have that have supported me. 151 00:09:29,920 --> 00:09:33,440 It has worked out really well. Like I mean air drops or even 152 00:09:33,440 --> 00:09:36,160 just staking like staking still doesn't. 153 00:09:36,440 --> 00:09:39,720 I don't I don't have enough ETH that staking pays all of my 154 00:09:39,720 --> 00:09:42,440 bills, but it is a a very nice foundation. 155 00:09:43,440 --> 00:09:47,160 Yeah, absolutely. So kind of when you came into 156 00:09:47,160 --> 00:09:51,320 this topic of staking, this was before the transition to proof 157 00:09:51,320 --> 00:09:56,120 of stake, right? So how has how has the Staker 158 00:09:56,680 --> 00:10:00,240 enthusiast community or the Staker community actually 159 00:10:00,240 --> 00:10:06,200 changed since? It, it has been AI would call it 160 00:10:06,200 --> 00:10:10,680 a dramatic transition. And in the beginning, 32 ether 161 00:10:10,680 --> 00:10:12,840 was not that expensive. And I, I can't really quote a 162 00:10:12,840 --> 00:10:15,280 price, but it was a couple $1000. 163 00:10:15,680 --> 00:10:21,600 And so really anyone who or most people who were deeply committed 164 00:10:22,240 --> 00:10:27,920 could buy a full validator and a mistaker with the changes in 165 00:10:27,920 --> 00:10:33,160 price and really onboarding more people who are speculative in 166 00:10:33,160 --> 00:10:36,360 nature rather than technical in nature, there has been a shift 167 00:10:36,360 --> 00:10:41,040 toward focusing on returns rather than focusing on securing 168 00:10:41,040 --> 00:10:44,960 the network. So this long shift has been away 169 00:10:44,960 --> 00:10:50,080 from individual takers and toward, you know, LS, DS, simple 170 00:10:50,080 --> 00:10:56,000 deposits, restaking whatever pays the the highest APY. 171 00:10:56,200 --> 00:11:00,160 And I don't think it was unpredictable, but I I guess I 172 00:11:00,160 --> 00:11:02,280 sort of hoped it would take longer than it has. 173 00:11:04,160 --> 00:11:06,560 What? What sort of topics are 174 00:11:06,560 --> 00:11:09,680 currently the mainstay of East Sticker? 175 00:11:11,560 --> 00:11:15,720 Nicks, I'll let you. I'm, I'm a little, I'm a little. 176 00:11:16,720 --> 00:11:19,920 I have turned more toward mainstream Ethereum the past few 177 00:11:19,920 --> 00:11:24,840 months and Nicks is still very deep in staking, so I I think 178 00:11:24,840 --> 00:11:28,200 you'd be better for. So, yeah, I'm full, I'm full 179 00:11:28,200 --> 00:11:30,040 time. I'm the only person who's full 180 00:11:30,040 --> 00:11:33,280 time at East Acre right now. So I would say that the main, 181 00:11:33,280 --> 00:11:37,600 the main things on East Acre are, are in staking in general 182 00:11:37,600 --> 00:11:40,160 is just making sure that staking is accessible for people. 183 00:11:40,160 --> 00:11:46,600 And so I actually, I, I just put out a survey of, of stakers 184 00:11:46,680 --> 00:11:49,280 because we were curious to see like what their pain points were 185 00:11:49,280 --> 00:11:52,880 and sort of what, what stumbling blocks. 186 00:11:52,880 --> 00:11:57,040 And I, I do have some we were talking about like this, the 187 00:11:57,040 --> 00:11:59,200 makeup of stakers earlier we were talking about like the 188 00:11:59,200 --> 00:12:01,840 technical backgrounds or the technical capabilities. 189 00:12:01,840 --> 00:12:04,520 And I actually do have some statistics from the survey. 190 00:12:05,480 --> 00:12:10,400 And it is, it is quite large. Like 9090% of people consider 191 00:12:10,400 --> 00:12:14,840 themselves having a technical background in staking or a 192 00:12:14,840 --> 00:12:17,640 technical background. 90% of people in staking consider 193 00:12:17,640 --> 00:12:19,040 themselves to have a technical background. 194 00:12:19,040 --> 00:12:25,480 So while it does like it involve some technical capability that 195 00:12:25,480 --> 00:12:28,160 people still need a lot of help troubleshooting and people do 196 00:12:28,160 --> 00:12:31,640 wish there was some sort of plug and play option that you could 197 00:12:31,640 --> 00:12:33,920 just plug in and like earn money with. 198 00:12:33,920 --> 00:12:37,840 But the fact the fact sort of is like you are at this point 199 00:12:37,840 --> 00:12:41,000 throwing down $100,000 into a validator. 200 00:12:41,880 --> 00:12:47,880 And so I, I think now the biggest, the biggest hurdle that 201 00:12:47,880 --> 00:12:51,880 we sort of need to overcome is the fact that, and this is a 202 00:12:51,880 --> 00:12:54,480 really big topic that we're probably going to get into is 203 00:12:54,480 --> 00:12:57,920 that the economies of scale are really hard to overcome. 204 00:12:57,920 --> 00:13:05,080 And we're seeing staking pools, liquid staking tokens and big 205 00:13:05,080 --> 00:13:09,120 professional operators benefit more from staking than home 206 00:13:09,120 --> 00:13:11,400 stakers are. And it's, it's making home 207 00:13:11,400 --> 00:13:14,880 stakers feel sort of like sidelined, feel sort of like 208 00:13:14,880 --> 00:13:19,080 staking isn't meant for them. And like they might be pushed 209 00:13:19,080 --> 00:13:22,840 out eventually because the as the APR continues to go down, 210 00:13:23,720 --> 00:13:26,360 they're just less competitive than these big staking 211 00:13:26,360 --> 00:13:30,400 operations that can put up with lower APR for some period of 212 00:13:30,400 --> 00:13:33,320 time because they're not necessarily relying on what the 213 00:13:33,320 --> 00:13:35,280 APR is. They're relying on the fees that 214 00:13:35,280 --> 00:13:37,720 they're taking from the people who are delegating their stake 215 00:13:37,720 --> 00:13:41,040 to them. OK, maybe that's that's kind of 216 00:13:41,040 --> 00:13:42,560 there. There's a lot to unpack here. 217 00:13:42,720 --> 00:13:46,800 So maybe kind of let's look into the different ways that staking 218 00:13:46,800 --> 00:13:49,640 happens, right? Say, say I have 32 ES. 219 00:13:49,640 --> 00:13:52,240 So in principle, I could run my own validator. 220 00:13:53,560 --> 00:13:56,480 If I don't want to do that, what are my alternatives? 221 00:13:57,920 --> 00:13:59,720 So if you don't want to run your own validator, you can 222 00:13:59,720 --> 00:14:03,360 definitely use a staking pool. And that is the option that most 223 00:14:03,360 --> 00:14:05,560 people are taking because that means you don't have to be 224 00:14:05,560 --> 00:14:09,800 engaged in the ecosystem at all. You can take your your capital, 225 00:14:09,800 --> 00:14:12,080 you throw it into a staking pool, they give you a liquid 226 00:14:12,080 --> 00:14:14,520 staking token back and then you can take that liquid staking 227 00:14:14,520 --> 00:14:18,840 token and walk it over to D5 for some extra yield, which makes 228 00:14:19,160 --> 00:14:22,960 liquid staking a whole lot more competitive than running a 229 00:14:22,960 --> 00:14:24,960 validator where you don't get any capital back. 230 00:14:24,960 --> 00:14:29,600 You can't reuse that capital and and like add add risk to it to 231 00:14:29,600 --> 00:14:33,080 get extra reward. But there are also other options 232 00:14:33,080 --> 00:14:37,320 like so 32 ETH is the minimum amount for a validator, but 233 00:14:37,320 --> 00:14:40,120 there are other protocols coming online that lower that financial 234 00:14:40,120 --> 00:14:43,080 barrier. And these, these have been a 235 00:14:43,080 --> 00:14:45,600 long time in the making. The, the one that's live right 236 00:14:45,600 --> 00:14:48,920 now is Rocket Pool and that lowers the barrier to 8 ETH plus 237 00:14:49,680 --> 00:14:54,440 2.4 ETH of 2.4 worth of their, their token in ETH. 238 00:14:55,800 --> 00:15:00,040 And so that sort, that sort of lowers the financial barrier, 239 00:15:00,040 --> 00:15:02,200 but it doesn't really lower the technical barrier. 240 00:15:02,200 --> 00:15:05,120 They have their own software that lowers the technical 241 00:15:05,120 --> 00:15:07,560 barrier a little bit, but you still need to be be using 242 00:15:07,560 --> 00:15:09,960 command line. But our big thing is we do want 243 00:15:09,960 --> 00:15:12,640 people running from home. Like we don't necessarily want 244 00:15:12,640 --> 00:15:15,880 people throwing things in delegating capital because 245 00:15:15,880 --> 00:15:18,320 there's enough of that going on. And that's actually become 246 00:15:18,320 --> 00:15:21,760 really problematic. So I will, I will just say, 247 00:15:21,760 --> 00:15:24,680 like, if people want to run from home, the technical barrier is a 248 00:15:24,680 --> 00:15:27,880 lot lower than people on Twitter seem to think it is. 249 00:15:28,600 --> 00:15:31,240 I think that people see command line and it scares them. 250 00:15:31,240 --> 00:15:33,840 And I am not, I'm not a super technical person. 251 00:15:33,840 --> 00:15:38,760 I came from science, not coding. And I don't know how to code. 252 00:15:38,760 --> 00:15:44,840 And I I managed to do it. One of the really interesting 253 00:15:44,840 --> 00:15:49,880 things I heard you acknowledge is that you can get more right 254 00:15:49,880 --> 00:15:55,680 now from delegating your ETH to someone else and you know, going 255 00:15:55,680 --> 00:15:59,160 through resaking or or depositing every yield. 256 00:15:59,720 --> 00:16:03,440 That is something that we we need us. 257 00:16:03,840 --> 00:16:08,240 We were hesitant to acknowledge as it, as it grew, we wanted to 258 00:16:08,240 --> 00:16:12,560 promote home staking as the best solution, as the most valuable 259 00:16:12,560 --> 00:16:14,480 solution, most rewarding solution. 260 00:16:14,960 --> 00:16:20,400 And only by acknowledging that the playing field is, is 261 00:16:20,400 --> 00:16:24,200 disparate, that you can make more through an LSD. 262 00:16:25,000 --> 00:16:29,840 That's the only way that we can tackle the situation and, and 263 00:16:29,840 --> 00:16:32,000 begin to improve it. And that's I'm I'm. 264 00:16:32,640 --> 00:16:35,760 It's a difficult acknowledgement, but it also 265 00:16:35,760 --> 00:16:41,640 brings the ability to change it. It also like I have trouble with 266 00:16:41,640 --> 00:16:48,200 that because so many people come into crypto as as is normal, 267 00:16:48,440 --> 00:16:51,240 just wanting to sort of gamble, wanting to make some money. 268 00:16:52,120 --> 00:16:56,840 And I would say 95% of this ecosystem is throwing darts at a 269 00:16:56,840 --> 00:17:01,800 board hoping to make it rich. But I, I believe in Ethereum as 270 00:17:01,800 --> 00:17:04,040 something that can level the playing field, something that 271 00:17:04,040 --> 00:17:08,480 can possibly like mitigate the wealth gap by by reducing the 272 00:17:08,480 --> 00:17:13,160 amount that economies of scale are able to bring you to. 273 00:17:13,160 --> 00:17:16,960 And I, I think that it's very, very important that we pay 274 00:17:16,960 --> 00:17:21,160 attention to how staking grows up and how the consensus layer 275 00:17:21,160 --> 00:17:25,319 and the base, the base protocol of Ethereum grows up in order to 276 00:17:25,319 --> 00:17:27,560 preserve that. Because I think that blockchain 277 00:17:27,560 --> 00:17:30,120 can actually like actually has the potential to be really 278 00:17:30,120 --> 00:17:35,960 dystopian if we have this insanely efficient surveillance 279 00:17:35,960 --> 00:17:40,280 system, but we don't have a way to protect against it being 280 00:17:40,280 --> 00:17:44,320 captured by just a few entities. And so I think that staking is 281 00:17:44,320 --> 00:17:46,760 the fundamental way to protect. Making sure that staking is 282 00:17:46,760 --> 00:17:50,400 decentralized is the fundamental way to protect that right now. 283 00:17:50,760 --> 00:17:55,400 And so the fact that you can make more on an LST right now 284 00:17:55,400 --> 00:18:00,600 is, is a little devastating because it means that we're 285 00:18:00,760 --> 00:18:05,760 losing this fight against, against making Ethereum anti 286 00:18:05,760 --> 00:18:09,280 monopolistic. There are changes in the, there 287 00:18:09,280 --> 00:18:13,160 are changes being proposed to sort of favor home stakers and 288 00:18:13,160 --> 00:18:19,800 favor more decentralized forms of staking that I am, I am very 289 00:18:19,800 --> 00:18:24,320 much in support of. And I hope that they get a lot 290 00:18:24,320 --> 00:18:28,280 more support, because I do still think that Ethereum can be this 291 00:18:30,040 --> 00:18:34,440 really ideal end game where the financial system is run in a 292 00:18:34,440 --> 00:18:38,120 much more equitable way. Can I high five you in the 293 00:18:38,120 --> 00:18:39,600 screen? Is that sorry? 294 00:18:40,320 --> 00:18:42,200 But see, that's why I listen to her. 295 00:18:42,200 --> 00:18:46,120 Sorry. Let's let's talk about liquid 296 00:18:46,120 --> 00:18:48,120 staking. So kind of like the liquid 297 00:18:48,120 --> 00:18:52,560 staking kind of it means you can kind of delegate less than 32 298 00:18:52,680 --> 00:18:58,400 ETH to kind of say Lido and basically they will generate 299 00:18:58,440 --> 00:19:01,480 yield on that for you. But at the same time, you get a 300 00:19:01,640 --> 00:19:05,920 liquid token back that you can use for instance, as collateral 301 00:19:05,920 --> 00:19:14,000 in say a, a lending pool where you can kind of borrow say ETH 302 00:19:14,000 --> 00:19:16,640 against this again and you can stay ETH. 303 00:19:16,880 --> 00:19:20,200 So basically you can kind of generate yield on this multi 304 00:19:20,440 --> 00:19:24,840 multiple times, which you can't if you're home Staker, right. 305 00:19:25,200 --> 00:19:30,720 So which is why in addition to kind of being technologically 306 00:19:30,720 --> 00:19:34,120 much, much easier because you just have to press it, it's just 307 00:19:34,120 --> 00:19:36,520 pressing a button, right? I mean, basically anyone who's 308 00:19:36,520 --> 00:19:38,440 used Lido, it's very easy to use. 309 00:19:38,840 --> 00:19:45,320 So in addition to being easier, it's also more lucrative, which 310 00:19:45,320 --> 00:19:52,320 is why pretty much around 30% of all stake is currently is in 311 00:19:52,320 --> 00:19:55,040 Lido. So kind of kind of can you walk 312 00:19:55,040 --> 00:19:58,240 us through the issues that this kind of presents? 313 00:20:00,240 --> 00:20:03,600 Yeah. So it's, it's definitely more 314 00:20:03,600 --> 00:20:07,840 lucrative, but it's also more risky when you stake all your, 315 00:20:07,840 --> 00:20:11,440 your risk is with the Beacon chain contract and with the 316 00:20:11,440 --> 00:20:16,040 staking contract and that's it. When you are using a liquid 317 00:20:16,040 --> 00:20:20,600 staking token, your risk is with the staking contract, with the 318 00:20:20,600 --> 00:20:23,800 protocol, with the smart contract of the liquid staking 319 00:20:23,800 --> 00:20:26,640 token. And so it introduces a lot more 320 00:20:27,360 --> 00:20:30,960 risk into the protocol. And when we have a situation 321 00:20:30,960 --> 00:20:37,080 right now like like Lido has 30% of the steak teeth is in Lido 322 00:20:37,640 --> 00:20:42,400 and that means that they are a sort of a systemic risk in 323 00:20:42,400 --> 00:20:45,720 Ethereum. And so if there was a bug in the 324 00:20:45,720 --> 00:20:50,520 Lido staking contract, that would not just be an issue for 325 00:20:50,520 --> 00:20:52,520 the people holding liquid staking tokens. 326 00:20:52,520 --> 00:20:55,320 That would be an issue for all of Ethereum, for everybody who's 327 00:20:55,320 --> 00:20:58,920 holding Ethereum for the entire crypto ecosystem, because 328 00:20:58,920 --> 00:21:02,040 Ethereum is such a large part of the crypto ecosystem. 329 00:21:03,000 --> 00:21:06,640 And so it would be one of those situations that you see in the 330 00:21:06,640 --> 00:21:11,480 news where it's like some large collapse that and people who had 331 00:21:11,600 --> 00:21:17,000 open positions get liquidated. And so this is not just an issue 332 00:21:17,000 --> 00:21:20,000 for stakers. This is not just an issue for 333 00:21:20,000 --> 00:21:23,120 ETH holders. This is an issue for the entire 334 00:21:23,120 --> 00:21:27,160 crypto ecosystem. Fisk like can you think of any? 335 00:21:27,720 --> 00:21:29,200 I, I wanted to piggyback on that. 336 00:21:29,200 --> 00:21:32,440 I was trying not to cut you off, but there there's a more long 337 00:21:32,440 --> 00:21:36,200 term and transcendental risk as well that comes from that kind 338 00:21:36,200 --> 00:21:39,960 of centralization. It is that adoption stamates 339 00:21:39,960 --> 00:21:44,320 over the long term. It's that when nation states, 340 00:21:44,360 --> 00:21:47,760 when corporations, when three letter agencies look at 341 00:21:47,760 --> 00:21:52,240 Ethereum, they they're actively evaluating to determine whether 342 00:21:52,240 --> 00:21:55,760 it is a a truly decentralized platform. 343 00:21:55,880 --> 00:21:58,400 Can we operate on this platform or can we manipulate it? 344 00:21:58,400 --> 00:22:02,280 Maybe. And for, for those actors to 345 00:22:02,280 --> 00:22:05,400 have the confidence that Ethereum is a truly 346 00:22:05,400 --> 00:22:08,600 decentralized platform, we need to ensure that there aren't 347 00:22:08,760 --> 00:22:11,280 these large actors who could control the network. 348 00:22:11,640 --> 00:22:15,200 And that feeds into our long term value, into our 20 or 30 349 00:22:15,200 --> 00:22:21,720 year value, because the failure of those large actors to adopt, 350 00:22:21,840 --> 00:22:24,840 because we're centralized will have this long term negative 351 00:22:24,840 --> 00:22:27,280 effect. But it's not obvious right now. 352 00:22:27,280 --> 00:22:29,720 Right now, you know, you're saying, hey, I'm getting, you 353 00:22:29,720 --> 00:22:36,720 know, 10% APY, but that that sacrifices our long term ability 354 00:22:36,720 --> 00:22:44,680 to, to, to dig into the potential user base. 1st, when 355 00:22:44,680 --> 00:22:48,640 you say control the network, what exactly do you mean? 356 00:22:48,640 --> 00:22:52,560 Do you mean kind of like censor people or take away funds from 357 00:22:52,560 --> 00:22:55,680 people or what's what's kind of the threat scenario? 358 00:22:55,680 --> 00:23:01,840 Here at, at 30%, I would say that there is no technical risk, 359 00:23:02,600 --> 00:23:09,760 but in, in, in the long run if, if Lido continues to grow, one 360 00:23:09,760 --> 00:23:12,920 of the things honestly, I try not to talk about them too much. 361 00:23:12,920 --> 00:23:16,480 I, I, I'm not interested in giving them a a lot more 362 00:23:17,160 --> 00:23:19,960 publicity, but they're developing, I think it's called 363 00:23:19,960 --> 00:23:27,200 Lido Alliance and they are organizing other operators as, 364 00:23:27,200 --> 00:23:30,120 as kind of a cohort. And one of the things that we 365 00:23:30,120 --> 00:23:34,120 don't want in taking is colluding operators. 366 00:23:34,320 --> 00:23:38,160 We don't want a large, we don't want, you know, Coinbase and 367 00:23:38,160 --> 00:23:41,880 Kraken to work together. We want them to be adversarial, 368 00:23:42,080 --> 00:23:45,200 maybe friendly, but but adversarial still so that 369 00:23:45,200 --> 00:23:48,400 they're not colluding to make decisions later. 370 00:23:48,680 --> 00:23:53,760 If there's an, a large alliance of stakers, a formal alliance of 371 00:23:53,760 --> 00:23:56,520 stakers, then they have these back channels where they can 372 00:23:56,520 --> 00:24:01,400 say, hey, you know, I don't, I don't like this initiative. 373 00:24:01,400 --> 00:24:05,360 Can we shut this down at the developer level or hey, can you 374 00:24:05,360 --> 00:24:09,960 get your people to vote for this or, or if they even were able to 375 00:24:09,960 --> 00:24:14,520 control 50 or 66% through this kind of collaboration collusion, 376 00:24:15,160 --> 00:24:18,320 it is possible that they could change the future of the 377 00:24:18,320 --> 00:24:23,200 network. And so it, it is not, I can't 378 00:24:23,200 --> 00:24:28,520 call it a a current threat. It is a potential threat that is 379 00:24:28,560 --> 00:24:31,040 continuing to grow. And that's that's why we're 380 00:24:31,040 --> 00:24:34,320 cautious of it. OK. 381 00:24:34,320 --> 00:24:35,560 Yeah. So I see that. 382 00:24:35,760 --> 00:24:39,320 So Nick, so you said earlier that there are ways of kind of 383 00:24:39,440 --> 00:24:43,160 that are being discussed of making solo staking more 384 00:24:43,160 --> 00:24:45,800 attractive. Can you go into those a little 385 00:24:45,800 --> 00:24:47,920 bit? Yeah, absolutely. 386 00:24:47,920 --> 00:24:53,000 So there are lots of different variables that can be messed 387 00:24:53,000 --> 00:24:55,520 with in order to make decentralized forms of staking 388 00:24:55,800 --> 00:25:01,240 more attractive. But there is not a full-fledged 389 00:25:01,240 --> 00:25:04,600 proposal right now. Our best proposal right now is 390 00:25:04,600 --> 00:25:09,160 basically saying all of the new new steak that's coming in, of 391 00:25:09,160 --> 00:25:12,160 all of the new steak that's coming in, 90% of it is coming 392 00:25:12,160 --> 00:25:14,920 from liquid staking protocols from staking pools right now. 393 00:25:15,240 --> 00:25:19,600 And so we are trending upwards. We have not, we have not seen a 394 00:25:19,600 --> 00:25:23,120 dip in, in the demand for staking. 395 00:25:23,120 --> 00:25:26,240 Like I think right now the queue just emptied out the staking 396 00:25:26,240 --> 00:25:29,000 queue, the number of validators coming in every epoch just 397 00:25:29,000 --> 00:25:33,760 emptied out for the first time and maybe more than a year. 398 00:25:34,200 --> 00:25:38,200 So the the staking queue, the amount of staked ETH people 399 00:25:38,400 --> 00:25:40,760 throwing capital in has been up only. 400 00:25:40,760 --> 00:25:44,480 And so there is a potential, there's, there's potentially a 401 00:25:44,480 --> 00:25:49,040 situation where we end up at 99.9% ETH staked. 402 00:25:49,360 --> 00:25:52,920 And in that situation, because we know that the majority of 403 00:25:53,440 --> 00:25:56,200 the, the home stakers, the people who are the most 404 00:25:56,200 --> 00:26:00,000 decentralized forms of staking came early on to the Beacon 405 00:26:00,000 --> 00:26:05,200 chain. And they represent now a small, 406 00:26:05,240 --> 00:26:07,760 a very small amount of the new state coming in. 407 00:26:07,960 --> 00:26:13,400 Can, can we slow down the amount of state coming in knowing that 408 00:26:13,720 --> 00:26:18,440 the majority of this is not the most valuable form of staking? 409 00:26:18,800 --> 00:26:25,360 So this, this change is the, the name of this really contentious 410 00:26:25,360 --> 00:26:29,920 thing is issuance changes. And so it's basically the reason 411 00:26:29,920 --> 00:26:32,120 it's so contentious is it's 'cause it's basically changing 412 00:26:32,120 --> 00:26:36,480 the monetary policy of Ethereum, saying we're going to change 413 00:26:36,560 --> 00:26:43,000 how, how Ethereum issues ETH to the people who are securing the 414 00:26:43,000 --> 00:26:46,040 chain in order to slow down stake. 415 00:26:46,040 --> 00:26:52,640 And what this is, is a mitigation proposal for, for 416 00:26:52,640 --> 00:26:55,920 it's an intermediate proposal for a proposal coming later on. 417 00:26:55,920 --> 00:26:58,640 And the the thing that the things that can be in that 418 00:26:58,640 --> 00:27:04,520 proposal later on are messing with with a number of different 419 00:27:04,520 --> 00:27:08,640 variables to make decentralized forms of staking more 420 00:27:08,640 --> 00:27:10,640 attractive. So right now this is just a 421 00:27:10,640 --> 00:27:14,480 simple issue and the the proposal that exists right now 422 00:27:15,480 --> 00:27:18,600 lowering issuance, it's just a very simple change. 423 00:27:18,600 --> 00:27:21,640 It's just lowering issuance so that staking is less attractive 424 00:27:21,640 --> 00:27:29,080 in the in the like right now so that we can propose something 425 00:27:29,080 --> 00:27:30,920 later on. What can come later on is 426 00:27:30,920 --> 00:27:35,680 something like correlated staking, correlated offline 427 00:27:35,680 --> 00:27:37,760 penalties. And so this is something Vitalic 428 00:27:38,200 --> 00:27:42,840 proposed. And basically right now what we 429 00:27:42,840 --> 00:27:44,880 have is correlated slashing penalties. 430 00:27:44,880 --> 00:27:48,480 So if somebody attacks the network, somebody has 1000 431 00:27:48,480 --> 00:27:51,120 validators that all double sign on something or all tried to 432 00:27:51,120 --> 00:27:54,200 change something on the network, we see that they have 1000 433 00:27:54,200 --> 00:27:55,840 validators and we slash all of them. 434 00:27:56,480 --> 00:28:01,880 The network, the consensus rules slash all of them and apply 435 00:28:01,880 --> 00:28:07,640 this, apply this factor to it saying a lot of validators got 436 00:28:07,640 --> 00:28:09,720 slashed at once. It looks like you guys are 437 00:28:09,720 --> 00:28:11,840 colluding. So we're going to slash more of 438 00:28:11,840 --> 00:28:14,880 your capital than it would if it was if you were just one staker 439 00:28:14,880 --> 00:28:18,280 who like messed up and double signed or or did something 440 00:28:18,280 --> 00:28:22,280 silly. And So what we could do is apply 441 00:28:22,280 --> 00:28:26,120 that correlation factor to people who are staking. 442 00:28:26,120 --> 00:28:30,200 So say I'm a professional operator who runs 10,000 443 00:28:30,200 --> 00:28:35,680 validators and I have a power blip and my state goes offline 444 00:28:36,080 --> 00:28:40,080 for 10 minutes and I missed two out of stations on the network. 445 00:28:40,080 --> 00:28:42,960 Could see that a 10,000 validators missed two out of 446 00:28:42,960 --> 00:28:50,080 stations and apply a correlation penalty to that stake that says 447 00:28:50,720 --> 00:28:53,960 this stake all looks like it's run by the same operator. 448 00:28:54,120 --> 00:28:56,840 So we're going to, we're going to give you a, a harsher 449 00:28:56,840 --> 00:28:59,600 penalty. And that that would 450 00:29:00,400 --> 00:29:03,160 preferentially benefit small stakers because they wouldn't 451 00:29:03,160 --> 00:29:04,840 experience that correlation penalty. 452 00:29:05,160 --> 00:29:07,920 And so that's just that's one of the things that could be applied 453 00:29:07,920 --> 00:29:16,240 to the eventual change that that we are trying to that we would 454 00:29:16,240 --> 00:29:21,000 like to implement some intermediate change that gave us 455 00:29:21,000 --> 00:29:25,560 time to implement that. It's worth saying that even even 456 00:29:25,560 --> 00:29:30,200 among people who are deeply aligned, like even with people 457 00:29:30,200 --> 00:29:33,440 that we share a lot of values with, that we see Ethereum in 458 00:29:33,440 --> 00:29:37,000 the same way. There's a lot of a lot of 459 00:29:37,000 --> 00:29:40,040 consternation about this because it changes the monetary supply 460 00:29:40,040 --> 00:29:43,920 because it, for some people, there was a promise to users 461 00:29:43,920 --> 00:29:46,400 that, you know, this is how things were going to go forward. 462 00:29:47,160 --> 00:29:50,240 But Nixon and I don't necessarily see that there has 463 00:29:50,240 --> 00:29:53,840 been any promise to anyone. We see that this is an emerging 464 00:29:53,840 --> 00:29:59,040 technology and that we ought to continue to develop it and 465 00:29:59,320 --> 00:30:04,240 really kind of shepherded and safeguarded until it is really 466 00:30:04,240 --> 00:30:06,160 hardened and calcified over the long run. 467 00:30:07,520 --> 00:30:10,720 And if you look at these proposals like the the majority 468 00:30:10,720 --> 00:30:13,520 of the criticism that you see, at least the where the criticism 469 00:30:13,520 --> 00:30:18,800 originates, if you look at the people who are most strongly 470 00:30:18,800 --> 00:30:22,200 criticizing the, a lot of them are associated with liquid 471 00:30:22,200 --> 00:30:24,720 staking pools. And so like, that sort of tells 472 00:30:24,720 --> 00:30:28,920 you that you're hitting the right pain points, but then they 473 00:30:28,920 --> 00:30:31,360 bring out these arguments that are like, oh, this will hurt 474 00:30:31,360 --> 00:30:35,480 solo staking or this isn't good for the network and it's a scare 475 00:30:35,480 --> 00:30:36,400 tack. It won't. 476 00:30:36,440 --> 00:30:38,640 You scared the children. Yeah. 477 00:30:39,440 --> 00:30:42,480 So it scares the rest of the Etherians because they're being 478 00:30:42,480 --> 00:30:44,880 told this, this proposal is the end of the world. 479 00:30:46,320 --> 00:30:50,960 And the amount of sort of capital that you see going into 480 00:30:52,400 --> 00:30:57,600 this propping up those concerns is concerning right now because 481 00:30:57,600 --> 00:31:03,560 right now the financial interest in preventing those changes is 482 00:31:03,560 --> 00:31:07,240 the least it will ever be from now on is the is the minimum 483 00:31:07,240 --> 00:31:10,040 that it will be from now on. As as we get further and further 484 00:31:10,040 --> 00:31:13,400 along the stake rate, like right now we're at 30%, we could be at 485 00:31:13,400 --> 00:31:16,800 40% in six months, we could be at 50% in eight months. 486 00:31:18,320 --> 00:31:22,880 That criticism will only go up, and it will be harder and harder 487 00:31:22,880 --> 00:31:28,000 to implement changes that hurt the people who are benefiting 488 00:31:28,000 --> 00:31:32,240 best from the system right now. The people who are benefiting 489 00:31:32,240 --> 00:31:35,240 most from the system right now have the most financial interest 490 00:31:35,400 --> 00:31:39,680 to stop these changes because the incumbents like to keep 491 00:31:39,680 --> 00:31:42,280 things like the status quo because that's who is 492 00:31:42,280 --> 00:31:44,800 benefiting. And it's funny because their 493 00:31:44,800 --> 00:31:47,920 arguments arguments don't sound selfish. 494 00:31:48,040 --> 00:31:52,000 Their arguments are this will harm home stakers. 495 00:31:52,200 --> 00:31:55,640 You must hate home stakers if you want to do this because home 496 00:31:55,640 --> 00:31:59,240 stakers are the most valuable thing and you would harm this by 497 00:31:59,240 --> 00:32:02,320 doing this. And those arguments come from 498 00:32:02,960 --> 00:32:05,960 constituents who do don't actually represent home stakers, 499 00:32:05,960 --> 00:32:09,960 but that is their argument. And they're, they're doing 500 00:32:09,960 --> 00:32:13,400 things like working to get developers on the core 501 00:32:13,400 --> 00:32:15,800 developers call. Like we, we need to do more 502 00:32:15,800 --> 00:32:19,360 research and include our developers in, in the, the core 503 00:32:19,360 --> 00:32:22,280 devs call. Those are the kind of tactics 504 00:32:22,320 --> 00:32:27,160 that they're they're, they're designed in the long term to 505 00:32:27,160 --> 00:32:31,000 derail something that is really better for the network in favor 506 00:32:31,000 --> 00:32:35,080 of their interest. There, there are home stakers 507 00:32:35,080 --> 00:32:37,920 who are against these changes and I don't want to, I don't 508 00:32:37,920 --> 00:32:41,880 want to dismiss their concerns because there are, I know, I 509 00:32:42,160 --> 00:32:45,840 personally know home stakers who are against these changes and 510 00:32:45,920 --> 00:32:47,840 some of them run thousands of validators. 511 00:32:47,840 --> 00:32:50,880 But I I would also argue that somebody who runs thousands of 512 00:32:50,880 --> 00:32:53,920 validators as a home staker is just as valuable as somebody who 513 00:32:53,920 --> 00:32:58,600 runs 11 validator. What we're really looking for is 514 00:32:58,600 --> 00:33:01,000 is millions of validators all around the world. 515 00:33:02,320 --> 00:33:04,760 Yeah. Can you clarify the exact 516 00:33:04,760 --> 00:33:08,040 intermittent proposal again? So basically is it to kind of 517 00:33:08,480 --> 00:33:13,400 cut off new people from staking or lower than staking rewards 518 00:33:13,400 --> 00:33:17,040 for everyone who's currently staking and will be staking in 519 00:33:17,040 --> 00:33:18,760 the future? So basically is it, is it kind 520 00:33:18,760 --> 00:33:22,000 of levelling the playing field or is it just kind of drawing a 521 00:33:22,000 --> 00:33:24,920 line where you say everyone who staked before this point is 522 00:33:24,920 --> 00:33:29,360 still good and everyone after? No, that that would be terrible 523 00:33:29,440 --> 00:33:31,360 that we acknowledge that, that would be terrible. 524 00:33:31,360 --> 00:33:34,400 So basically you have an X axis and AY axis and this is the 525 00:33:34,400 --> 00:33:37,360 amount of stake that or the amount of APR that people are 526 00:33:37,360 --> 00:33:39,800 getting. The less stake that is in the 527 00:33:39,800 --> 00:33:44,080 system, the more APR people get. And so that's just taking this 528 00:33:44,080 --> 00:33:48,800 curve and moving it down. So it's just lowering APR so. 529 00:33:49,080 --> 00:33:52,200 OK, everyone gets less. Yes. 530 00:33:53,920 --> 00:33:57,400 Up to 100%, they eat, there's still an APR, there's a return 531 00:33:57,400 --> 00:33:58,720 and it, it could be lower and lower. 532 00:33:58,960 --> 00:34:03,160 What we're really interested in is changing that curve so that 533 00:34:03,160 --> 00:34:09,360 around 30% of stake, 25% of stake that rewards, this is 534 00:34:09,600 --> 00:34:12,239 complex terminology. Rewards actually become 535 00:34:12,239 --> 00:34:16,880 negative. So the closer you get to 2527%, 536 00:34:16,880 --> 00:34:20,639 whatever that that sweet spot is, your rewards trickle down 537 00:34:20,639 --> 00:34:27,639 to, you know, 1%, .1% zero and then a negative return. 538 00:34:27,840 --> 00:34:32,920 And yes, that will cause some people, some entities to 539 00:34:33,120 --> 00:34:38,280 withdraw from the network. We, we believe, and there are 540 00:34:38,280 --> 00:34:41,480 really 2 interesting angles on this, we believe that that will 541 00:34:41,480 --> 00:34:46,280 lower interest in liquid staking tokens and that many home 542 00:34:46,280 --> 00:34:48,239 validators will still survive that. 543 00:34:48,480 --> 00:34:52,960 So it is a cut, but it is a beneficial to long term cut. 544 00:34:53,120 --> 00:34:57,880 And the other side of that is if if a maximum of 30% of Ether are 545 00:34:57,880 --> 00:35:03,360 staked then Ether holders Ether is still the currency of 546 00:35:03,640 --> 00:35:10,320 Etherium stake or an LST provider that controlled 80% of 547 00:35:10,320 --> 00:35:12,120 stake. ETH does not control the 548 00:35:12,120 --> 00:35:14,840 network. Etherium holders who hold the 549 00:35:14,840 --> 00:35:19,040 other 70% of of Ether, they are still the stewards of the 550 00:35:19,040 --> 00:35:22,600 network, not someone who holds a third party token. 551 00:35:23,000 --> 00:35:27,600 That is, that is, you know, then the that is potentially the 552 00:35:27,600 --> 00:35:29,680 money of ether, if that makes sense. 553 00:35:30,160 --> 00:35:35,320 Yeah, that makes sense. So is is the idea that the 554 00:35:35,320 --> 00:35:40,920 network security doesn't benefit from kind of people from the 555 00:35:41,000 --> 00:35:44,640 31st to the 99th percentile of East stake? 556 00:35:44,640 --> 00:35:47,400 So basically, if every single ETH were to be staked, wouldn't 557 00:35:47,400 --> 00:35:50,880 make the network any more secure than say, if a third of ETH were 558 00:35:50,880 --> 00:35:53,840 staked? That is correct. 559 00:35:54,760 --> 00:35:57,040 We don't have an exact number and that is a criticism. 560 00:35:57,040 --> 00:36:00,400 We don't have an exact number for what is needed to secure the 561 00:36:00,400 --> 00:36:03,280 network. I've heard estimates that are 562 00:36:03,280 --> 00:36:09,040 anywhere from 1% to 12% of all staked of all Ether needs to be 563 00:36:09,040 --> 00:36:10,600 staked in order to secure the network. 564 00:36:10,880 --> 00:36:13,400 We're at 30 something percent. Everything above this is 565 00:36:13,400 --> 00:36:17,120 superfluous, and everything above this serves validators, 566 00:36:17,120 --> 00:36:20,320 and validators aren't meant to be served by the network, they 567 00:36:20,320 --> 00:36:23,360 are in service of the network. OK. 568 00:36:23,560 --> 00:36:29,000 And so basically you just said that kind of the APR depends on 569 00:36:29,000 --> 00:36:30,760 kind of where you are on this act. 570 00:36:30,760 --> 00:36:34,280 So how many, how many people are how many validates are staking 571 00:36:34,280 --> 00:36:37,120 at the same time, right? So basically, but everyone makes 572 00:36:37,120 --> 00:36:39,920 the same APR regardless of when they started. 573 00:36:39,920 --> 00:36:42,960 So basically, if more people come online, then everyone gets 574 00:36:42,960 --> 00:36:44,800 less, right? That's kind of the the basic 575 00:36:44,800 --> 00:36:49,200 mechanism, correct. OK, then let's talk about kind 576 00:36:49,200 --> 00:36:53,480 of solo stakers and what an idea network kind of what it would 577 00:36:53,480 --> 00:36:55,960 look like. So basically having outlined 578 00:36:55,960 --> 00:37:00,360 kind of all of the drawbacks of being a solo staker, you need to 579 00:37:00,360 --> 00:37:04,080 have like some technical background, even if you're not a 580 00:37:04,080 --> 00:37:07,240 dev kind of at least you have to be kind of like happy using 581 00:37:07,240 --> 00:37:10,560 command line and so on. And I mean, there are also 582 00:37:10,760 --> 00:37:13,840 somewhat plug and play systems. So kind of you could buy a DAP 583 00:37:13,840 --> 00:37:18,360 note or Nevado and kind of it's, it's not really like you plug it 584 00:37:18,360 --> 00:37:20,680 in, in the power source and you're good. 585 00:37:20,680 --> 00:37:24,640 But kind of it, it lowers kind of the barrier to kind of entry 586 00:37:24,640 --> 00:37:30,200 for, for people. So the large capital requirement 587 00:37:30,200 --> 00:37:31,800 side. So those are people who kind of 588 00:37:31,800 --> 00:37:35,600 have $100,000 in ETH lying around. 589 00:37:36,000 --> 00:37:38,800 Whose stakes and why do they stake themselves? 590 00:37:40,640 --> 00:37:44,560 So I would say the people who stake are the people who want 591 00:37:45,080 --> 00:37:50,280 low risk returns, low people who have low risk returns and people 592 00:37:50,280 --> 00:37:57,440 who are at least technically confident enough to know that 593 00:37:57,440 --> 00:37:59,400 they can copy and paste from a guide. 594 00:38:00,000 --> 00:38:02,520 We they can use command line if it's copying and pasting from a 595 00:38:02,520 --> 00:38:05,520 guide. Like I said, 90% of stakers 596 00:38:05,880 --> 00:38:08,000 consider themselves technically competent. 597 00:38:08,880 --> 00:38:11,920 It also one of the big barriers is Internet connection is 598 00:38:11,920 --> 00:38:17,480 bandwidth. And so we do see that 95% of 599 00:38:17,480 --> 00:38:23,040 people who report staking who, who report are either from North 600 00:38:23,040 --> 00:38:27,400 America, Europe or Australia. We see very few stakers in Latin 601 00:38:27,400 --> 00:38:29,680 America. We see almost no stakers in 602 00:38:29,680 --> 00:38:32,800 Africa. There are some in Southeast 603 00:38:32,800 --> 00:38:35,160 Asia. Singapore is a hotspot for note 604 00:38:35,160 --> 00:38:37,480 operators. And, and again, that's, that's a 605 00:38:37,480 --> 00:38:40,160 lot about the capital requirement, but a lot of that 606 00:38:40,160 --> 00:38:42,320 is about the network requirement too. 607 00:38:42,320 --> 00:38:45,160 Because I'm in, I'm in South America right now. 608 00:38:45,840 --> 00:38:49,640 Here in South America, it's harder to have a stable Internet 609 00:38:49,640 --> 00:38:52,400 connection outside of very urban regions. 610 00:38:52,400 --> 00:38:55,680 I'm in Buenos Aires and Buenos Aires has great Internet, but 611 00:38:55,680 --> 00:38:59,520 outside of this very small capital, 50% of the country is 612 00:38:59,520 --> 00:39:02,640 in poverty. And they, they're just not 613 00:39:02,640 --> 00:39:03,760 serviced. They don't have the 614 00:39:03,760 --> 00:39:07,800 infrastructure that's needed to. Even if they could procure 615 00:39:07,800 --> 00:39:13,040 $100,000 or whatever the minimum requirement is for a protocol 616 00:39:13,040 --> 00:39:15,000 that lowers the financial barrier, they couldn't 617 00:39:15,000 --> 00:39:18,120 necessarily set up a node that could keep up with the with the 618 00:39:18,120 --> 00:39:21,920 bandwidth requirements. But a home staker in your 619 00:39:21,920 --> 00:39:24,680 definition is someone who actually runs the physical 620 00:39:24,680 --> 00:39:27,240 infrastructure at home. So kind of if I were to have 621 00:39:27,240 --> 00:39:30,800 like an AWS node, I wouldn't be a home staker. 622 00:39:30,800 --> 00:39:34,000 Is that correct? You wouldn't be a home staker, 623 00:39:34,000 --> 00:39:35,320 but you would be a remote staker. 624 00:39:35,320 --> 00:39:37,640 I still, I still consider those valuable players. 625 00:39:37,640 --> 00:39:40,480 They're not as valuable as a home staker because they 626 00:39:40,840 --> 00:39:42,480 somebody could turn off their node. 627 00:39:43,240 --> 00:39:48,640 But if if you're running a stake staking node that is in AWS or 628 00:39:48,640 --> 00:39:55,480 cloud or any Cantabo or any like service that gives you your bare 629 00:39:55,480 --> 00:39:57,920 metal service or cloud service, you're still running the 630 00:39:57,920 --> 00:40:00,640 configuration of your node and I still consider that valuable. 631 00:40:01,280 --> 00:40:03,640 You you wrote a great disambiguation of that. 632 00:40:04,240 --> 00:40:09,000 Where is that? It's on East Acre's paragraph 633 00:40:09,040 --> 00:40:12,640 blog. And has to be a link to that in 634 00:40:12,640 --> 00:40:15,680 the show notes. It is a, she gives a great 635 00:40:16,520 --> 00:40:18,520 distinction. I I don't recall seeing remote 636 00:40:18,520 --> 00:40:22,160 staker on there, but it, it really does break down the 637 00:40:22,160 --> 00:40:25,600 different kinds of stakers and the value that they provide to 638 00:40:25,600 --> 00:40:26,920 the network. I was impressed with that. 639 00:40:29,000 --> 00:40:30,520 OK. So let's look at kind of a 640 00:40:30,520 --> 00:40:32,160 healthy staking ecosystem, right? 641 00:40:32,160 --> 00:40:36,560 So basically what do you want to avoid is that nodes are too 642 00:40:36,560 --> 00:40:39,360 correlated with each other. So kind of there's different 643 00:40:39,360 --> 00:40:41,640 dimensions that we can think of that kind of they could be 644 00:40:41,640 --> 00:40:44,320 correlated in. So kind of there's very physical 645 00:40:44,320 --> 00:40:46,920 ones like location and jurisdiction. 646 00:40:46,920 --> 00:40:50,560 So kind of you could have a natural disaster, say an 647 00:40:50,560 --> 00:40:53,960 earthquake or a volcano. It could have a jurisdictional 648 00:40:54,280 --> 00:40:57,760 Black Swan event where for instance, I don't know, the 649 00:40:57,760 --> 00:41:02,280 government says everyone who stakes ethers provides the 650 00:41:02,280 --> 00:41:05,600 security and if you don't turn it off right now, we will come 651 00:41:05,600 --> 00:41:09,040 after you sort of thing. And then there's using cloud 652 00:41:09,040 --> 00:41:11,840 providers, right? So basically if everyone uses 653 00:41:12,360 --> 00:41:15,280 AWS, then kind of obviously kind of the bottleneck here is AWS. 654 00:41:15,280 --> 00:41:18,800 And I mean, if you look at what cloud providers are out there, 655 00:41:18,960 --> 00:41:24,040 there's basically there's AWS and Google Cloud and Hetzner and 656 00:41:24,040 --> 00:41:27,480 then everything else comes like, you know, very distant third, 657 00:41:27,600 --> 00:41:32,240 fourth, then there's clients, right? 658 00:41:32,240 --> 00:41:36,400 So basically we have beacon and execution chain clients. 659 00:41:37,000 --> 00:41:41,160 So kind of if you have a client bug and kind of say 50% of the 660 00:41:41,160 --> 00:41:44,680 network use a single client, then obviously that part of the 661 00:41:44,680 --> 00:41:49,480 network would come down. So how do you see all of these 662 00:41:49,480 --> 00:41:52,200 dimensions which are critical at the moment? 663 00:41:52,760 --> 00:41:54,280 Which are you paying attention to? 664 00:41:54,280 --> 00:41:59,240 When which are we doing OK on? I would like to let Nick's 665 00:41:59,240 --> 00:42:03,320 answer, but I I also want to include that social coordination 666 00:42:03,320 --> 00:42:07,080 and that is that collusion between multiple operators. 667 00:42:07,920 --> 00:42:11,160 But yeah, and Nick's year, you're probably more attuned to 668 00:42:11,160 --> 00:42:15,040 answer the whole question. I would say let's, let's do 669 00:42:15,040 --> 00:42:18,360 three major categories, software, software diversity, 670 00:42:18,360 --> 00:42:20,720 hardware diversity, geographic diversity. 671 00:42:21,400 --> 00:42:23,680 But software diversity is talking about the consensus 672 00:42:23,680 --> 00:42:25,320 layer clients, the execution layer clients. 673 00:42:25,320 --> 00:42:28,560 And that is, that's a really easy fix for node operators 674 00:42:28,560 --> 00:42:31,240 where you run a campaign that basically says like run a 675 00:42:31,240 --> 00:42:35,880 minority client because there are all these terrible things 676 00:42:35,880 --> 00:42:39,240 that could happen if if everybody is running the same 677 00:42:39,240 --> 00:42:41,480 consensus or execution layer client. 678 00:42:41,720 --> 00:42:44,480 And that's, that's often misunderstood as like an 679 00:42:44,480 --> 00:42:47,840 altruistic endeavor, like, oh, if I wanted to be selfish, I 680 00:42:47,840 --> 00:42:50,640 would run them at super majority client and I would be fine. 681 00:42:50,640 --> 00:42:53,960 But that's not how it works. You put yourself at risk if you 682 00:42:53,960 --> 00:42:55,480 are running a super majority client. 683 00:42:55,480 --> 00:42:58,600 So I think the Ethereum community has actually shown a 684 00:42:58,600 --> 00:43:03,040 great deal of motivation in changing that. 685 00:43:03,040 --> 00:43:07,360 And Fizz sort of led the the initial call for consensus layer 686 00:43:07,360 --> 00:43:10,080 client diversity. And then there's hardware 687 00:43:10,080 --> 00:43:11,880 diversity. And I think we're, I think we're 688 00:43:11,880 --> 00:43:15,640 actually doing great on that in terms of hardware. 689 00:43:15,640 --> 00:43:21,360 You don't want everybody running the same PC, the same the hard 690 00:43:21,360 --> 00:43:24,200 drive, the same RAM. And really, we've done a really 691 00:43:24,200 --> 00:43:26,440 good job of making sure that people are running on different, 692 00:43:27,840 --> 00:43:30,400 different sort of hardware. It's funny you say that because 693 00:43:30,400 --> 00:43:34,080 I would love to see more platforms like, you know, gaming 694 00:43:34,080 --> 00:43:38,920 systems and toasters and refrigerators like porting that 695 00:43:39,040 --> 00:43:41,520 to, you know, different ARM style architectures and risk 696 00:43:41,520 --> 00:43:44,560 style architectures like that would be that for me. 697 00:43:44,560 --> 00:43:46,480 That would be real hardware diversity. 698 00:43:47,680 --> 00:43:52,720 That would be niche nerd stuff. My Casio smartwatch. 699 00:43:54,120 --> 00:43:55,640 Hey, somebody runs one on a vape. 700 00:43:55,760 --> 00:43:57,840 Someone actually runs a validator on a vape. 701 00:43:57,920 --> 00:44:00,800 It's kind of cool. I don't know if if it's maybe 702 00:44:00,800 --> 00:44:05,640 it's just a OK, now that I said it, it sounds egregious, but I 703 00:44:05,640 --> 00:44:07,520 saw it on Twitter, so it's real. Yeah. 704 00:44:07,520 --> 00:44:10,080 Well, it must be true. That's right. 705 00:44:11,680 --> 00:44:12,840 Yeah. And then there's geographic 706 00:44:12,840 --> 00:44:15,320 diversity and that like geographic and hardware 707 00:44:15,320 --> 00:44:17,640 diversity sort of overlap because you don't want everybody 708 00:44:17,640 --> 00:44:21,440 running in the cloud. And I think that ether if I 709 00:44:21,440 --> 00:44:27,320 likes to tout this one, this one statistic that some percentage 710 00:44:27,320 --> 00:44:31,960 of noses run within like the within like 15 miles of the CIA 711 00:44:31,960 --> 00:44:33,480 headquarters. And I think that's because like 712 00:44:33,480 --> 00:44:37,640 that's where the maybe AWS or some cloud services reporting. 713 00:44:37,640 --> 00:44:39,120 That's where the CIA runs their nodes. 714 00:44:42,160 --> 00:44:44,200 Yeah. I think that I think that covers 715 00:44:44,200 --> 00:44:47,400 all of the sort of. For you, what is what is 716 00:44:47,400 --> 00:44:50,880 geographical is geopolitical social To me, like that's all 717 00:44:50,880 --> 00:44:54,920 three of those together because it's geography, it's political 718 00:44:54,920 --> 00:44:58,240 and it's social collusion like these large people colluding 719 00:44:58,240 --> 00:45:00,400 together. It's anything that is not 720 00:45:00,400 --> 00:45:02,720 hardware or software, it is geopolitical social. 721 00:45:03,480 --> 00:45:05,000 OK. Let's talk about kind of the 722 00:45:05,000 --> 00:45:09,400 client diversity because that that's kind of where currently 723 00:45:09,400 --> 00:45:11,840 the, the situation is most dire, right. 724 00:45:11,840 --> 00:45:15,920 So basically you said if I use a super majority client, say I use 725 00:45:15,920 --> 00:45:21,920 guess which is in excess of like 60% or so of the network at the 726 00:45:21,920 --> 00:45:26,920 moment as my execution layer client, how do I put myself at 727 00:45:26,920 --> 00:45:30,400 risk? Can I say first, I don't, I 728 00:45:30,400 --> 00:45:33,800 don't think it's the most dire. I think that social collusion is 729 00:45:33,800 --> 00:45:38,920 currently the most dire, but client diversity has the most 730 00:45:38,920 --> 00:45:41,520 attention right now. And so, yeah. 731 00:45:42,040 --> 00:45:43,560 OK, let's talk about social occlusion. 732 00:45:43,560 --> 00:45:48,840 Next, so the way that you put yourself at risk so say so gap 733 00:45:48,840 --> 00:45:52,520 is actually under probably under 66%. 734 00:45:52,520 --> 00:45:57,040 And I say probably because our data isn't necessarily correct. 735 00:45:57,040 --> 00:46:01,600 We sort of have these, we have these probabilities, we'll just 736 00:46:01,600 --> 00:46:04,600 we'll just leave it like that. Technically it is impossible to 737 00:46:04,600 --> 00:46:08,800 see what the actual makeup of the execution layer clients is. 738 00:46:08,800 --> 00:46:10,880 It's it's possible to see the consensus layer clients. 739 00:46:11,680 --> 00:46:15,880 But so say we're above 66% and you are running the Super 740 00:46:15,880 --> 00:46:18,160 majority client. I'm going to name it as a 741 00:46:18,160 --> 00:46:20,160 different one because I don't want people to think Geth is a 742 00:46:20,160 --> 00:46:21,880 bad client. Like let's say Nethermind is 743 00:46:21,880 --> 00:46:27,200 above 66% and I'm running Nethermind and Nethermind has a 744 00:46:27,960 --> 00:46:32,200 bug where they they actually sign something that's incorrect 745 00:46:32,840 --> 00:46:35,520 and they finalize it because it looks correct. 746 00:46:35,520 --> 00:46:39,400 Because if 66% of the network sign something that looks 747 00:46:39,400 --> 00:46:42,920 correct to them, they're going to continue on. 748 00:46:42,920 --> 00:46:45,440 And it's going to take a while to figure out what's happening 749 00:46:45,440 --> 00:46:48,680 because what it's going to look like is that the minority 750 00:46:48,680 --> 00:46:51,960 clients are going to look like they're missing out of stations, 751 00:46:51,960 --> 00:46:55,800 like they did something wrong. And so the supermajority client 752 00:46:55,800 --> 00:46:59,280 is going to finalize to an incorrect chain. 753 00:46:59,680 --> 00:47:04,640 And once the supermajority client finalizes to an incorrect 754 00:47:04,640 --> 00:47:08,720 chain, you can't come back. You can't you're you, you 755 00:47:08,800 --> 00:47:13,040 essentially are slashed for 100% of your steak. 756 00:47:13,040 --> 00:47:17,200 You can learn lose all 32 ETH because you can't come back from 757 00:47:17,200 --> 00:47:20,280 that. What would what's more likely to 758 00:47:20,280 --> 00:47:22,800 happen is there would be some bug where you just stopped a 759 00:47:22,800 --> 00:47:27,080 testing. And so that's like sort of the 760 00:47:27,080 --> 00:47:30,360 second situation, you stop a testing, it's very clear that 761 00:47:30,360 --> 00:47:32,760 the Super majority client is having an issue because the 762 00:47:32,760 --> 00:47:36,640 whole network stops finalizing and that's finalizing not 763 00:47:36,840 --> 00:47:38,720 progressing. So people are still able to make 764 00:47:38,720 --> 00:47:41,240 transactions, but they're getting reorged after two or 765 00:47:41,240 --> 00:47:43,320 three blocks. And that means that like 766 00:47:44,640 --> 00:47:48,560 reorging is like the the your transactions can be reverted. 767 00:47:49,160 --> 00:47:52,000 And so that would be realistically what would happen 768 00:47:52,000 --> 00:47:55,280 is the the devs would spring into action and there would be a 769 00:47:55,280 --> 00:47:56,960 fix put out within a couple of hours. 770 00:47:57,240 --> 00:48:01,280 But what happens in that situation is that something 771 00:48:01,280 --> 00:48:04,040 kicks in called the inactivity leak. 772 00:48:04,520 --> 00:48:10,360 And that's that is the purpose of that is to drain these 773 00:48:10,360 --> 00:48:14,560 validators so that they represent a smaller portion of 774 00:48:14,560 --> 00:48:17,440 the network and the network can start finalizing as quickly as 775 00:48:17,440 --> 00:48:20,160 possible again. And so if you are in the 776 00:48:20,160 --> 00:48:23,240 supermajority client, in that situation, your validator starts 777 00:48:23,240 --> 00:48:26,960 getting drained at a higher rate because it's trying to get you 778 00:48:26,960 --> 00:48:29,640 off of the network. So either way, in these two 779 00:48:29,640 --> 00:48:31,840 scenarios, there's a third scenario that's even less, 780 00:48:32,880 --> 00:48:34,760 that's even less severe than that. 781 00:48:34,760 --> 00:48:38,560 But in those two scenarios, you were the, you were your capital 782 00:48:38,560 --> 00:48:42,240 is being lost. And in that more severe scenario 783 00:48:42,240 --> 00:48:46,960 where you've lost 32 ETH, all of a sudden this is a whole network 784 00:48:46,960 --> 00:48:51,200 wide issue because the people who lost their stake, who lost 785 00:48:51,200 --> 00:48:56,200 32 ETH, who right now are going to be 30% of the the network 786 00:48:56,720 --> 00:48:59,840 there. Well, 30% of 30 of the portion 787 00:48:59,840 --> 00:49:04,120 that is staked are going to be fighting to say, you know what, 788 00:49:04,120 --> 00:49:08,680 let's fork, let's fork and let's, let's remove this thing 789 00:49:08,680 --> 00:49:13,360 that happened and pretend that I didn't get slashed or let's fix 790 00:49:13,360 --> 00:49:16,560 this in some other way. And then you have the code is 791 00:49:16,560 --> 00:49:20,760 law people versus like the social consensus issue people 792 00:49:21,680 --> 00:49:23,880 and the whole network is thrown into this. 793 00:49:23,880 --> 00:49:27,880 Do you remember when the Dow hack happened and it was like a, 794 00:49:28,120 --> 00:49:30,080 a big issue? So you basically have this 795 00:49:30,080 --> 00:49:35,840 situation again, where I couldn't see being a business 796 00:49:35,840 --> 00:49:40,880 like an accounting business and saying like this is the network 797 00:49:40,880 --> 00:49:45,400 I trust, like the IT would throw things into such contention that 798 00:49:45,400 --> 00:49:47,920 I'm sure businesses would be like, this is this is not a 799 00:49:47,920 --> 00:49:52,760 serious financial system. We can't, we can't run a 800 00:49:52,760 --> 00:49:56,080 business on this because it's it's a mess. 801 00:49:57,200 --> 00:50:01,160 So Supervis, you said that you are most worried not about the 802 00:50:01,160 --> 00:50:04,440 client diversity issue, but you're most worried about kind 803 00:50:04,440 --> 00:50:09,640 of the social political kind of collusion scenario? 804 00:50:10,680 --> 00:50:12,880 This is something I haven't really talked publicly about, 805 00:50:13,440 --> 00:50:18,200 but I feel like client diversity was a very big deal a year or 806 00:50:18,200 --> 00:50:21,120 two ago. Right now, there is tremendous 807 00:50:21,120 --> 00:50:24,440 awareness about it. We have, we're over the hump. 808 00:50:24,720 --> 00:50:29,080 There's enough awareness that if, if we continue at our 809 00:50:29,080 --> 00:50:32,480 current pace, client diversity, I don't want to say it's going 810 00:50:32,480 --> 00:50:34,160 to take care of itself. It's still going to take a lot 811 00:50:34,160 --> 00:50:36,680 of effort, but the inertia is there. 812 00:50:37,800 --> 00:50:41,880 The real, my real concern about the success of the network now 813 00:50:42,200 --> 00:50:45,440 is primarily social. It's not geographical or 814 00:50:45,440 --> 00:50:52,120 political, yet it is social. And that is the idea of power 815 00:50:52,120 --> 00:50:55,280 seeking, which is natural. And I'd have no difficulty with 816 00:50:55,280 --> 00:50:57,720 power seeking I expected in something this large. 817 00:50:58,240 --> 00:51:01,840 But if any of those power seekers are successful, 818 00:51:02,920 --> 00:51:07,320 especially in what I consider this the use of aetherium, then 819 00:51:07,320 --> 00:51:09,720 it could have very, very long term consequences. 820 00:51:10,200 --> 00:51:14,040 And I'm careful not not to name names other, do you know, other 821 00:51:14,040 --> 00:51:17,320 than what I've already said. But it really just takes an 822 00:51:17,320 --> 00:51:23,160 entity or two entities to say, hey, we don't, we don't want 823 00:51:23,160 --> 00:51:26,160 this proposal that Nixa was talking out to go forward. 824 00:51:26,520 --> 00:51:28,840 That would harm our bottom line in the long run. 825 00:51:28,960 --> 00:51:32,520 So let's just have a back channel here where we talk about 826 00:51:32,720 --> 00:51:36,920 how we can shape and influence governance to make sure that 827 00:51:36,920 --> 00:51:40,880 what we want is advanced. And then they, you know, kind of 828 00:51:41,080 --> 00:51:44,240 put some money into it. Maybe they have researchers that 829 00:51:44,240 --> 00:51:47,640 they're funding and the, the conclusions of that research 830 00:51:47,640 --> 00:51:51,680 tends to support their foundations. 831 00:51:52,360 --> 00:51:58,080 Or I, I call them mercenary researchers or they, they are 832 00:51:58,480 --> 00:52:02,120 researchers for hire who will inevitably come to the 833 00:52:02,120 --> 00:52:04,880 conclusion that the payee wants them to find. 834 00:52:05,760 --> 00:52:08,560 And they can be pretty compelling and pretty loud. 835 00:52:09,320 --> 00:52:13,360 And so that kind of social collusion to me is the the, our 836 00:52:13,360 --> 00:52:16,880 biggest current threat. And it's, it's difficult because 837 00:52:16,880 --> 00:52:21,520 it's, it's hidden and you don't always know about it and you may 838 00:52:21,520 --> 00:52:25,080 never know about it. In fact, really effective social 839 00:52:25,080 --> 00:52:27,280 collusion is something you'll never know about. 840 00:52:27,280 --> 00:52:30,080 It looks organic. It looks like something that the 841 00:52:30,080 --> 00:52:36,040 community wanted to happen. And so the way to prevent that 842 00:52:36,040 --> 00:52:41,640 kind of social collusion is to get as many independent 843 00:52:41,640 --> 00:52:46,240 individual operator validators everywhere in the world so that 844 00:52:46,240 --> 00:52:48,120 they're all thinking for themselves. 845 00:52:48,120 --> 00:52:51,760 They're all saying, is this good for Ethereum? 846 00:52:51,760 --> 00:52:56,160 Is this good for my stake? Or is this is this serving some 847 00:52:56,160 --> 00:52:59,600 other entity? But isn't that just protocol 848 00:52:59,600 --> 00:53:01,760 lobbyism? So because we see that kind of 849 00:53:01,760 --> 00:53:06,840 like in in politics outside of, you know, Ethereum and staking 850 00:53:06,840 --> 00:53:12,800 and so on anyway. So how do you think we can 851 00:53:13,680 --> 00:53:18,920 create a staking ecosystem where that isn't a factor if it seems 852 00:53:18,920 --> 00:53:22,080 like it's something that naturally emerges in these in 853 00:53:22,080 --> 00:53:24,440 these situations? Yeah. 854 00:53:24,440 --> 00:53:29,680 To call it simple protocol lobbyism, I think is a 855 00:53:29,680 --> 00:53:37,320 underestimation of of the threat because these entities are, I 856 00:53:37,320 --> 00:53:38,720 don't want to make them nebulous, but they're like 857 00:53:38,720 --> 00:53:40,920 chameleons. They can appear to be anyone 858 00:53:40,920 --> 00:53:43,280 they want. They can come into a forum and 859 00:53:43,280 --> 00:53:47,280 say I'm a home staker and this is how I feel and This is why I 860 00:53:47,280 --> 00:53:50,960 don't want this to happen. I'm, I guess I'm most concerned 861 00:53:50,960 --> 00:53:55,040 because of the nebulous and chameleon nature of the threat 862 00:53:55,240 --> 00:53:59,680 that I feel like it's probably already bigger than we've 863 00:53:59,680 --> 00:54:01,600 acknowledged. And I do think it is far more 864 00:54:01,600 --> 00:54:04,800 significant than just protocol lobbying. 865 00:54:04,800 --> 00:54:09,200 I think it is large entities who are willing to collude to get 866 00:54:09,200 --> 00:54:12,760 what they want. I think that money can be a 867 00:54:12,760 --> 00:54:14,880 powerful motivator to get things done. 868 00:54:14,880 --> 00:54:20,160 And so I do think that like lobbying can sort of be pushed 869 00:54:20,160 --> 00:54:23,520 and it could be guided in a in a beneficial direction. 870 00:54:23,520 --> 00:54:27,560 I think that these these companies with financial 871 00:54:27,560 --> 00:54:32,640 interests can reasonably and valuably contribute to research, 872 00:54:32,640 --> 00:54:38,160 but I think that there needs to be a neutral, a neutral sort of 873 00:54:38,160 --> 00:54:44,880 body who is the layer between that financial interest and the 874 00:54:44,880 --> 00:54:46,640 people who are actually doing the analysis. 875 00:54:46,640 --> 00:54:47,840 Like that's what universities are. 876 00:54:47,840 --> 00:54:50,360 That's what research in general has always been. 877 00:54:50,600 --> 00:54:54,360 There's always been this neutral entity in between the people who 878 00:54:54,360 --> 00:54:58,800 want the research done and the people who the research benefits 879 00:54:59,120 --> 00:55:05,000 versus the people who are doing the analysis and can be swayed 880 00:55:05,280 --> 00:55:10,960 sort of to lean to, to have biases towards some outcomes. 881 00:55:12,040 --> 00:55:14,560 So I think I don't, I don't think it's impossible for 882 00:55:15,960 --> 00:55:19,280 companies with financial interest to valuably contribute 883 00:55:19,280 --> 00:55:21,040 to research. I do think that that's possible. 884 00:55:23,160 --> 00:55:27,320 But if you kind of look at a research that we've seen come 885 00:55:27,320 --> 00:55:30,800 out in the past, so things like smoking is really good for you, 886 00:55:31,400 --> 00:55:35,160 best you can put into your body is like three Big Macs a day or 887 00:55:35,160 --> 00:55:36,520 something. I mean, obviously there have 888 00:55:36,520 --> 00:55:40,760 been researchers who've published these sorts of studies 889 00:55:40,760 --> 00:55:43,640 usually then turns out that they were surprise, surprise, 890 00:55:43,640 --> 00:55:47,400 financed by Big Tobacco or McDonald's, whatever. 891 00:55:48,600 --> 00:55:54,680 So I mean, how do you, and I mean, researchers actually have 892 00:55:54,680 --> 00:55:58,200 to disclose their financial interests, right, if they have 893 00:55:58,200 --> 00:56:00,000 them. So how do you see that kind of 894 00:56:00,000 --> 00:56:03,960 play out here? I think that we should leave 895 00:56:03,960 --> 00:56:07,000 science to the scientists. Like I don't think that that a 896 00:56:07,160 --> 00:56:09,760 company should be bringing in house like a bunch of 897 00:56:09,760 --> 00:56:13,240 researchers who say like, OK, we want you to study this and we 898 00:56:13,480 --> 00:56:16,800 bring your results to us and we will give you advice on how it's 899 00:56:16,800 --> 00:56:18,160 going. And then we'll look over the 900 00:56:18,160 --> 00:56:22,520 drafts and then we'll publish it from our research wing. 901 00:56:22,520 --> 00:56:30,480 I think that they should go to to economy departments in 902 00:56:30,920 --> 00:56:38,520 universities and say we want to set up a $1 million grant for 903 00:56:38,520 --> 00:56:41,120 anybody who wants to study the intersection of computer science 904 00:56:41,120 --> 00:56:43,560 and economy. And we're going to be hands off 905 00:56:43,560 --> 00:56:45,200 about it. You guys decide who gets this 906 00:56:45,200 --> 00:56:47,560 funding. You decide which which PhD 907 00:56:47,560 --> 00:56:50,440 students want to study this. And I think that that's 908 00:56:50,440 --> 00:56:51,680 possible. And I think that if you look 909 00:56:51,680 --> 00:56:56,760 back at like or dubious research that's been done on like a glass 910 00:56:56,760 --> 00:57:00,320 of wine a day is good for you, that you'll probably see that 911 00:57:00,640 --> 00:57:04,080 the there, there weren't very good, there weren't very good 912 00:57:04,080 --> 00:57:07,720 practices put in place. And I, I have, I don't know, I 913 00:57:07,720 --> 00:57:10,120 don't have anything specific about that, but I, I'm betting 914 00:57:10,120 --> 00:57:15,560 that that was not, those were not very well respected methods 915 00:57:16,280 --> 00:57:20,040 with those with those studies. I I love that you brought that 916 00:57:20,040 --> 00:57:24,040 one up because that belief still persists once you once you put 917 00:57:24,040 --> 00:57:26,840 the money and effort into promoting that kind of belief. 918 00:57:27,560 --> 00:57:30,440 Even after it's debunked, it still has. 919 00:57:31,040 --> 00:57:35,720 It still pervades. Culture, it's like, I want to 920 00:57:35,720 --> 00:57:37,680 believe that too. Glass of red wine per day. 921 00:57:37,680 --> 00:57:39,320 I think it's two drinks, 3 drinks. 922 00:57:39,640 --> 00:57:43,560 It's like, yeah, just being healthy. 923 00:57:44,280 --> 00:57:49,480 Yeah, it's like, absolutely. How much do you think this is a 924 00:57:49,480 --> 00:57:52,720 war that kind of has to be won on won on culture? 925 00:57:52,720 --> 00:57:55,240 I mean, so kind of should we kind of just establish kind of 926 00:57:55,240 --> 00:57:57,960 this is kind of what we believe in as takers? 927 00:57:58,160 --> 00:58:00,680 You shouldn't delegate to like large staking pools. 928 00:58:00,680 --> 00:58:02,880 So if you delegate kind of delegate to your friend, don't 929 00:58:02,880 --> 00:58:07,480 delegate to like the the the protocol that already holds 30%. 930 00:58:09,000 --> 00:58:11,400 Or do you think this is something that kind of has to be 931 00:58:11,400 --> 00:58:14,760 put into rules into like extra hard coded rules? 932 00:58:16,080 --> 00:58:20,000 It's never going to work to, to make it like a social consensus 933 00:58:20,000 --> 00:58:23,200 because the reality is, is 95% of people, maybe even higher, 934 00:58:23,200 --> 00:58:26,600 maybe 99% of people who come into crypto, they're just 935 00:58:26,600 --> 00:58:30,000 throwing their dart at the wall. They're just hoping for the, 936 00:58:30,840 --> 00:58:35,760 they're just hoping to invest in the, in the Google of 2000 and 937 00:58:36,480 --> 00:58:38,960 trying to make it big. And like, if you think about it, 938 00:58:38,960 --> 00:58:42,800 that's what crypto has done. It's, it's had big, big talk 939 00:58:42,800 --> 00:58:47,000 about like becoming a global banking, a global financial 940 00:58:47,000 --> 00:58:48,520 system that's accessible to everybody. 941 00:58:48,520 --> 00:58:52,520 But like if you put people who make a dollar a day in the same 942 00:58:52,520 --> 00:58:57,200 room as the people who make like $10,000 a day, there's going to 943 00:58:57,200 --> 00:59:00,720 be this hustle culture that comes from one side. 944 00:59:00,720 --> 00:59:03,400 And you can't blame them. You can't stop that. 945 00:59:03,400 --> 00:59:05,880 You can't be like, you should be more ideological because it's 946 00:59:06,000 --> 00:59:10,120 like they're trying to survive and gambling will always happen. 947 00:59:10,120 --> 00:59:14,480 So I do think that crypto in general has been this idea of 948 00:59:14,480 --> 00:59:21,640 how do we take greed and how do we take normal human, normal 949 00:59:21,640 --> 00:59:27,280 human vices and use them, guide them and make it so that those 950 00:59:27,280 --> 00:59:31,320 things are incorporated into a protocol rather than having to 951 00:59:31,320 --> 00:59:36,360 fight against it and having to tell people to like be the on 952 00:59:36,360 --> 00:59:39,080 the, the losing end of a, a prisoner's dilemma. 953 00:59:39,160 --> 00:59:42,880 Like I think that we should we should try to account for human 954 00:59:42,880 --> 00:59:45,040 behaviour rather than fight human behaviour. 955 00:59:46,080 --> 00:59:48,400 I love that. I think those are actually 956 00:59:48,520 --> 00:59:53,080 really nice parting words. So if people kind of want to get 957 00:59:54,240 --> 00:59:58,040 involved in the East Sacred community or kind of want advice 958 00:59:58,040 --> 01:00:01,480 on how to set up and so on, how do they find you guys? 959 01:00:03,280 --> 01:00:08,960 Our website is East Acre dot CC. The discord is really active and 960 01:00:08,960 --> 01:00:11,320 the subreddit is really active if you're more into Reddit than 961 01:00:11,320 --> 01:00:15,720 discord. People love people who come in. 962 01:00:15,720 --> 01:00:18,560 And if you come in and say hey, I'm I'm interested in staking, 963 01:00:18,560 --> 01:00:20,200 how do I start this? People love to help. 964 01:00:22,360 --> 01:00:27,320 Fantastic. Then let's let's see whether we 965 01:00:27,320 --> 01:00:33,680 get any new stakers interested. It's definitely a super 966 01:00:34,040 --> 01:00:40,680 interesting community is kind of to me, it's always reminiscent 967 01:00:40,680 --> 01:00:42,840 of kind of, you know, kind of the maker communities. 968 01:00:42,840 --> 01:00:45,160 I mean, not, not like crypto maker, but kind of like the 969 01:00:45,160 --> 01:00:46,960 people who like tinker with stuff. 970 01:00:47,400 --> 01:00:51,160 It's that kind of people who kind of end up in those and and 971 01:00:51,160 --> 01:00:53,320 that that they're fun people, they're good people. 972 01:00:54,560 --> 01:00:58,240 There's a big overlap too. Good. 973 01:00:58,600 --> 01:01:02,040 And it's actually, it's really interesting because to be in the 974 01:01:02,040 --> 01:01:04,760 community, you kind of have to have some skin in the game. 975 01:01:04,760 --> 01:01:06,320 You don't have to. We have people who don't stake 976 01:01:06,320 --> 01:01:08,880 at all, but you know, many people have 32 Ether, many 977 01:01:08,880 --> 01:01:13,080 people have one Ether. And you also have to have some 978 01:01:13,080 --> 01:01:15,560 interest in the long term success of Etherium. 979 01:01:15,760 --> 01:01:18,440 And so putting those two things together, and I'm not saying 980 01:01:18,440 --> 01:01:21,840 it's everyone, but a vast majority of the people have 981 01:01:21,840 --> 01:01:23,880 something at stake and they have an interest in Etherium. 982 01:01:24,080 --> 01:01:28,720 It makes for a really interesting group of people who 983 01:01:28,720 --> 01:01:30,040 are are really fun to engage with. 984 01:01:30,880 --> 01:01:34,160 And there's also some pride that kind of goes along with it. 985 01:01:34,320 --> 01:01:36,440 I mean, basically if you go to conferences and talk about 986 01:01:36,440 --> 01:01:39,600 staking people who stake, they talk about this with pride. 987 01:01:39,600 --> 01:01:43,800 Like it's, it's like a part of their identity and kind of like 988 01:01:44,000 --> 01:01:46,280 self description how they see themselves, right? 989 01:01:47,360 --> 01:01:48,960 How do you know if someone's a solo staker? 990 01:01:49,480 --> 01:01:55,680 They'll tell. You fantastic. 991 01:01:55,840 --> 01:01:57,720 It's been a pleasure having both of you on. 992 01:01:58,120 --> 01:02:01,000 And yeah, keep keep us on our toes. 993 01:02:01,320 --> 01:02:03,440 You're keeping us honest. Here is the ecosystem. 994 01:02:04,360 --> 01:02:07,000 Thank you so much for having us. Thank you so much, Frederick.