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This is episode episode. 479 
with guest Anthony. 

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Giuliano 
Welcome to episode of 

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Revolution. 
I'm Brian Crane and I'm here 

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with Felix lunch. 
Today, we're going to speak with

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Antonio Giuliano. 
He's the founder of dyd X dydx 

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is the largest crypto. 
Derivatives exchange or 

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decentralized. 
Derivatives exchange have about 

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1.2 Two billion trading volume 
per day. 

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It's also the largest layer to 
application on a theorem right 

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now running on Stark where. 
And I'm sure a lot of people 

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have seen some months ago. 
They've also announced that 

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they're going to build their own
Cosmos chain, so that also got a

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lot of attention. 
And so the lots of interesting 

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things to touch on. 
Thanks so much for joining us. 

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Yeah. 
Excited for the conversation. 

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Cool. 
Well, I mean, they started 

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beginning like how did you get 
into crypto and what's the story

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of He started to idx. 
Yeah, absolutely. 

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So I got into crypto in 2015, 
when I interviewed for a job at 

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coinbase, which was my first job
right out of college, I kind of 

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got to coinbase differently than
most people in that I didn't 

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really know anything about 
Bitcoin or cryptocurrency at the

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time, it was just one of the 
like 20 or so companies, I 

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applied to senior year of school
and I was kind of just more 

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interested in finding a really 
high-quality startup but whence 

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I interviewed and all these 
people. 

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All seemed really smart, really 
awesome, and really excited 

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about this random thing that I 
didn't understand in Bitcoin. 

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So, I was like, okay, what the 
hell? 

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Like, I really want to work with
these people seems like an 

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awesome opportunity and a great 
company at least, and they all 

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seem excited about this thing. 
I really get it. 

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But, you know, I'll take a leap 
of faith and kind of at least 

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spend a year or two working 
there. 

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So, went out to San Francisco 
work there for a year. 

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I was like the hundredth 
employee or so at coinbase and 

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it was a really awesome 
opportunity. 

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Unity just to get a chance to 
have a great front row, seat to 

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kind of see what was happening 
in crypto at the time. 

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So there are a lot of really 
great people who since then have

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gone to do really awesome things
at coinbase. 

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We are fortunate to be, you 
know, by far, one of the the 

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biggest and kind of only one of 
the legit companies building in 

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crypto at the time. 
So bunch of other really great 

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people. 
In crypto would come and talk to

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us. 
Like we had vitalik come and 

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talk really early, Joey Krug, 
the founder of auger come and 

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teach us how to build smart 
contracts and it was a really 

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kind of pivotal time in crypto 
in terms of that was right 

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around the time. 
Back in 2015, early 2016, when 

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aetherium was launched. 
And I think it took all of us a 

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while to wrap our heads around, 
what's possible with aetherium. 

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And I remember kind of learning 
from Olaf and Fred about, hey, 

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what is gasps, what are smart 
contracts? 

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What is solidity? 
Things like that? 

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And again I didn't really get it
but I kind of Took a little bit 

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of a mental leap of faith 
because there are clearly, all 

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these really smart people that 
were excited about it. 

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And I kept looking into it and 
then I think at one moment, it 

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just kind of clicked for me. 
Oh, like this is just Bitcoin 

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but you can build programs on 
top of it. 

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And it sounds kind of simple 
now. 

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And I think once people have 
understood it more en masse, 

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they can explain it more simply 
but it really wasn't obvious to 

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people at the time. 
But once I kind of clicked for 

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me, I realized this was just a 
totally new paradigm of 

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computing. 
Where for the first time you can

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write these programs that 
execute totally autonomously 

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totally deterministically and 
without being controlled by 

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anybody and I was like, ah, aha.
This is something that's 

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fundamentally new. 
Like there must be something 

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someday that this can be useful 
for and I've always been really 

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entrepreneurial. 
I really wanted to start my 

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company, even before my own 
company, even before going into 

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coinbase, and I was pretty 
transparent with Brian and 

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everybody else on the team about
that and they were super 

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supportive and then After 
coinbase, I agree, fully worked 

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at Uber, but then started dydx, 
and mid-2017, and actually, the 

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first thing I started, when I 
try to start my own crypto 

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company was not dydx, it was a 
search engine for decentralized 

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apps and not a lot of people 
know this, but I built this out 

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and early 2017 and I tell the 
story because I feel like I 

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learned something important in 
it. 

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So I try to build a search 
engine for decentralized apps, 

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using kind of the data that I 
was on the blockchain to inform 

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kind of the ranking of 
decentralized apps but the 

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problem was there. 
We're only like 10 decentralized

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apps in the world and early 
2017. 

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So what's the point of a search 
engine? 

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If there's nothing to search 
for? 

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And the point of the story is I 
really learned the importance of

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timing and building products and
building companies like maybe 

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someday, it'll make sense to 
build a search engine on 

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decentralized apps, but 
certainly not in early 2017. 

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So I kind of took a pause on 
that and I thought about Okay, 

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what could I build? 
That would actually be useful in

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crypto right now back in 2017 
and back then. 

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And still to this day, the main 
thing crypto is used for is 

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trading and speculation, and 
that was right around the time. 

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When the very first 
decentralized, exchanges were 

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just starting to come out things
like 0x things like Khyber. 

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So I took a look at that and I 
was like, wow, this actually 

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kind of makes sense like you can
build an exchange that is just 

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code and people can use that 
rather than centralized 

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intermediaries and that has a 
ton of If it's, in terms of 

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censorship resistance, in terms 
of transparency, in terms of 

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security of funds what's coming 
next after that. 

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And if you think about finances,
kind of a stack where you have 

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to build the things lower in the
stack, so things like money, 

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which in a decentralized sense 
could be things like etherium 

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and Bitcoin and stable coins and
then you build exchanges after 

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that. 
So things like zero X and now 

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unit flop, kind of the last step
in the stack. 

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There is more Advanced Financial
products and those are things 

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like Mitchell derivatives margin
trading and that's what we set 

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out to build in dydx. 
So that's kind of the journey 

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and we've been at it since 2017.
Yeah. 

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Also the that's super cool that 
you found that Niche there and I

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guess obviously became one of 
the big players. 

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We also wanted to just generally
for the listeners to get an 

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overview of what are actually 
the dydx products right now. 

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Maybe you can like kind of 
elaborate a little bit on that. 

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Yeah, so we have one main 
product. 

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And it is a financial derivative
and it's the most popular type 

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of financial derivative that's 
traded in cryptocurrency and 

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specifically, that's called a 
Perpetual contract. 

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A Perpetual contract is a type 
of derivative contract that as 

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per the name, never expires, 
it's perpetual kind of goes on 

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forever and the reason these are
so popular in turn in trading 

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cryptocurrency is because 
they're really accessible to 

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kind of the audience that trades
cryptocurrency in this kind of 

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prosumer retail Trading. 
And that's Global. 

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And we have built these into 
decentralized finance and kind 

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of the way that they work is. 
You can point a Perpetual at 

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whatever you know price you 
might want to point it at and 

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specifically you can make a 
Perpetual for Bitcoin. 

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You could make a Perpetual for 
aetherium. 

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You could theoretically make 
Perpetual is that are pointed at

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pretty much any type of asset 
that you might want to trade 

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right now on dydx only Perpetual
is are available for a 

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cryptocurrencies kind of just 
like the top. 

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Markets on coin market cap and 
these Perpetual contracts 

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though, they sound Advanced. 
There are actually really 

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critical and integral to the 
crypto markets and they're by 

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far the most traded product in 
crypto. 

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So about two-thirds of crypto 
volume is traded through 

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Perpetual contracts and only 
one-third is traded through 

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spot. 
Just kind of like a fancy word 

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for just regular old, buying and
selling. 

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So these things are really 
popular in centralized 

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exchanges. 
They or popularized by B, Max 

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and now are available on by 
Ants. 

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They had been available on ft x 
but our IP for that. 

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And now they are available in 
defy as well through dydx and a 

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couple other decentralized 
exchanges. 

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Do you rely on? 
Like, I guess some sort of price

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feed oracle's for that and like,
how this dydx solve that using 

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chain link or some other kind 
of? 

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Yeah. 
So Perpetual do rely on price 

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oracle's even centralized 
Perpetual for lie, on price 

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oracle's more or less or index 
prices. 

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And the way that that works on 
dydx and pretty much every other

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legitimate Perpetual is trading 
venue is you take the prices of 

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a given asset on a bunch of 
different exchanges? 

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Has and then you kind of take 
the median of them which kind of

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removes outliers. 
So you might look at the price 

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of Bitcoin on like coinbase and 
finance and whatever other 

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exchanges are the most liquid 
and have the most trading 

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volume. 
So, right now we do use 

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chain-link price oracle's, and 
then as you alluded to before 

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the big thing that we're 
building right now is the next 

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version of dydx called dyd X V4.
And in that version, the price 

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oracle's will kind of be built 
directly into the validators 

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themselves on our cause Chan and
there won't be any external 

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price Oracle. 
So chain link now and then 

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eventually our own later also be
able to go to definitely get 

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back to you before. 
I think you kind of alluded to 

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it a little bit already and and 
obviously yeah how how like the 

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product is very accessible the 
Perpetual. 

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But you can you like expand a 
little bit? 

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Who are the users of dydx? 
Yeah, absolutely. 

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So there is two main classes of 
users that we have the First 

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class of users is crypto 
institutions, and these are 

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hedge funds that are trading 
crypto. 

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There's a lot of different types
of them at it. 

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Kind of the two main types of 
crypto institutions that are 

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most actively trading right now 
are going to Native crypto 

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trading firms. 
So like crypto hedge funds, like

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wintermute or something similar 
to that. 

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And then there are kind of more 
traditional call it Wall Street 

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trading firms. 
That have really gotten into 

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crypto trading in a big way, so 
like a Trading or Tower research

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or others. 
So that's kind of one big class 

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of users and most of the actual 
volume does come from these 

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institutional users, but that 
doesn't actually necessarily 

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mean that they're more important
than the other class of users, 

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other class of users, that's big
In Perpetual and therefore also 

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on dydx is kind of prosumer 
crypto Traders and specifically 

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International crypto traders who
make up the bulk of the 

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derivatives trading Market 
especially in crypto. 

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And these users are just regular
old individuals, but they are 

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kind of more sophisticated and 
demand kind of more advanced 

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trading products than most 
crypto Traders. 

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It's not your friend that bought
their first Bitcoin yesterday. 

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It's kind of somebody that's 
either for a full-time gig or 

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kind of on the side likes to 
basically day trade or trade 

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with more Advanced Financial 
products, like perpetual 's and 

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these users are actually the 
most important users not to say 

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that. 
Art's importance, but most 

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exchanges build, first, and 
foremost for kind of these 

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prosumer users because they're 
the source of most of the quote 

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organic taker volume on the 
platform. 

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And that's kind of the most 
valuable volume. 

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So you want to make sure the 
product is really excellent for 

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those users. 
And they have all the tools that

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they need to kind of maximize 
their returns maximize their 

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risk management and all of that.
And then crypto is actually 

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really different in terms of its
Market structure than 

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traditional. 
Ants In traditional Finance, 

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really almost all of the volume 
comes from institutions. 

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Sure. 
There are some prosumer like 

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retail traders that trade in the
traditional markets, through 

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things like Robin Hood, but they
make up a very small portion of 

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the overall trading volume in 
crypto. 

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It's completely opposite where a
lot of the trading volume does 

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come from retail basically and 
then the institutions will 

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follow over rounds wherever most
of the retail volume is so if 

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you're an exchange or an 
exchange, All kind of the name 

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of the game is attracting more 
of that volume, but we've also 

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00:12:26,400 --> 00:12:30,800
really intentionally set dydx 
top to be a platform that is 

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really accessible to 
institutional Traders as well. 

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And that's something that I 
think is pretty novel for D5 

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platform, because we've really 
intentionally tried to make the 

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technical trading experience on 
dydx, similar to a centralized 

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00:12:46,200 --> 00:12:49,800
exchange actually because that's
what the users are used to 

236
00:12:49,800 --> 00:12:53,000
trading on. 
So like their API endpoints that

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feel really similar to a 
centralized exchange API 

238
00:12:55,900 --> 00:12:58,500
endpoints and that makes it much
easier for a lot of these 

239
00:12:58,500 --> 00:13:02,400
institutions to come and trade 
on dydx as their first foray 

240
00:13:02,500 --> 00:13:05,500
into defy in fast forward to 
now, we've actually been really 

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successful with that and pretty 
much all the top crypto trading 

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firms are trading on dydx now, 
as for a lot of them as their 

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first thing and defy, and I 
think that was a really 

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intentional thing. 
We tried to set out to do. 

245
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Yeah. 
I mean I'm somebody who's, you 

246
00:13:23,900 --> 00:13:26,400
know, I guess had long-term 
crypto investors but not not a 

247
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traitor, right? 
So I've mostly been this sort 

248
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of, you know, spot volume type 
user but I was You know, did 

249
00:13:34,900 --> 00:13:39,600
some like put on some trace on 
vix before because I want to 

250
00:13:39,600 --> 00:13:43,200
tell, you know, try out before a
podcast as to say, it's like so 

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smooth and intuitive and like a 
super straightforward. 

252
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So I think that was really, 
really nice user experience, 

253
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really nice flow. 
Yeah, I'm glad to hear it, and 

254
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that's been something that's 
been an intentional Choice as 

255
00:13:56,100 --> 00:13:58,300
well. 
Like, I was mentioning before is

256
00:13:58,600 --> 00:14:02,200
trying to make the experience, 
again, feel like just a regular 

257
00:14:02,200 --> 00:14:04,900
old trading venue and that's 
actually pretty Hard to do from 

258
00:14:04,900 --> 00:14:10,600
a technical perspective in defy.
But doing things like being a 

259
00:14:10,600 --> 00:14:13,500
really early, adopter of a lot 
of these new technologies. 

260
00:14:13,900 --> 00:14:16,900
Like you mentioned it before. 
But currently we're by far the 

261
00:14:16,900 --> 00:14:21,700
largest app on layer 2 and then 
fast forward to the next thing 

262
00:14:21,700 --> 00:14:23,800
that we're building. 
We're going to be building a 

263
00:14:23,800 --> 00:14:27,700
sovereign, our own basically 
blockchain for dydx and all of 

264
00:14:27,700 --> 00:14:31,100
that is kind of centered around 
the the user experience. 

265
00:14:32,200 --> 00:14:36,000
That I think you kind of alluded
to like a bunch of stuff that I 

266
00:14:36,200 --> 00:14:38,100
may be. 
So kind of a larger question 

267
00:14:38,400 --> 00:14:42,300
here, what do you think? 
Are the main things that you did

268
00:14:42,300 --> 00:14:45,700
right and that allowed you IDs 
to get so successful. 

269
00:14:46,400 --> 00:14:49,600
So I think one of the first 
things is that we were early 

270
00:14:49,700 --> 00:14:53,100
actually and that gave us kind 
of a lot of time to learn and 

271
00:14:53,100 --> 00:14:56,700
build and iterate kind of gave 
us more shots on goal to build 

272
00:14:56,700 --> 00:14:59,700
the right thing and build in a 
really iterative approach. 

273
00:14:59,800 --> 00:15:02,700
But if you are really early and 
certainly we Or when we were 

274
00:15:02,700 --> 00:15:06,900
founded in 2017, and I think, 
even now Defy is in the really 

275
00:15:06,900 --> 00:15:09,400
early stages. 
You have to combine that with a 

276
00:15:09,408 --> 00:15:12,800
really long-term approach 
towards what you're building and

277
00:15:12,800 --> 00:15:16,500
kind of just the internalization
that what you're building really

278
00:15:16,500 --> 00:15:18,900
is not going to take off, 
probably for like five to ten 

279
00:15:18,900 --> 00:15:21,500
years plus and I still think 
that's the case and do you fight

280
00:15:21,500 --> 00:15:24,100
today and I think a lot of 
people don't build with kind of 

281
00:15:24,108 --> 00:15:26,800
that long-term focus. 
And that's probably the reason 

282
00:15:26,800 --> 00:15:31,200
like 75 percent plus of kind of 
call it new Ventures and new 

283
00:15:31,200 --> 00:15:33,000
markets. 
Well so I think that was 

284
00:15:33,000 --> 00:15:35,900
probably one of the first and 
biggest things, I think this 

285
00:15:35,900 --> 00:15:39,400
Focus that we have on building a
great product experience was 

286
00:15:39,400 --> 00:15:42,500
really useful as well. 
And then just building a really 

287
00:15:42,500 --> 00:15:46,100
strong core team and especially 
really strong technical core 

288
00:15:46,100 --> 00:15:49,700
team. 
Like we again have been building

289
00:15:49,700 --> 00:15:52,900
smart contracts for over 5 years
at this point. 

290
00:15:52,900 --> 00:15:57,400
Like I don't code so much 
personally these days, but I 

291
00:15:57,400 --> 00:16:00,800
coded a lot of our early smart 
contracts along with some of our

292
00:16:00,900 --> 00:16:04,700
early engineers We set a lot of 
the paradigms for how smart 

293
00:16:04,700 --> 00:16:07,300
contracts are built. 
And I think it's also this 

294
00:16:07,300 --> 00:16:12,500
mentality that we have of 
risk-taking from a product 

295
00:16:12,500 --> 00:16:14,700
perspective. 
And I think what I mean by that 

296
00:16:14,700 --> 00:16:17,900
is, like, we've made a lot of 
bold choices from a product 

297
00:16:17,900 --> 00:16:20,600
perspective and I think we've 
executed on them pretty quickly 

298
00:16:20,600 --> 00:16:22,800
as well, especially in crypto 
terms. 

299
00:16:23,200 --> 00:16:26,800
So, like we've been talking 
about dydx is currently on layer

300
00:16:26,800 --> 00:16:30,200
2 and I think it's been 
basically two years now that 

301
00:16:30,200 --> 00:16:33,000
we've been on layer 2. 
I know it's gotten a lot more 

302
00:16:33,000 --> 00:16:36,000
popular recently, but like we 
are on L2 before people were 

303
00:16:36,000 --> 00:16:38,400
really even talking about it and
that was a really intentional 

304
00:16:38,400 --> 00:16:43,300
choice and we did that and the 
previous L1 contracts or kind of

305
00:16:43,300 --> 00:16:45,700
sunsetted and that was kind of 
risky, right? 

306
00:16:45,700 --> 00:16:48,500
Because we had something that 
was working on layer 1. 

307
00:16:48,700 --> 00:16:52,800
But we went out and we felt 
strongly that this new 

308
00:16:52,800 --> 00:16:56,400
technology could give a better 
product experience because it 

309
00:16:56,400 --> 00:16:59,200
can process way more 
transactions and you know, in a 

310
00:16:59,200 --> 00:17:01,600
previous version or you just 
focus getting absolutely 

311
00:17:01,600 --> 00:17:04,200
hammered. 
I gasps fee is the latency is 

312
00:17:04,200 --> 00:17:06,800
way lower. 
So Brian, like you mentions now,

313
00:17:06,800 --> 00:17:10,700
our product can feel just really
Snappy kind of again more like a

314
00:17:10,708 --> 00:17:15,900
centralized product but kind of 
being that Trailblazer and when 

315
00:17:15,900 --> 00:17:19,400
there hasn't been a really great
example of a previous project 

316
00:17:19,400 --> 00:17:21,200
building on some of these new 
technologies. 

317
00:17:21,200 --> 00:17:22,900
That's gotten a ton with ton of 
adoption. 

318
00:17:23,300 --> 00:17:26,900
I think can be scary because a 
lot of times just in life and 

319
00:17:26,900 --> 00:17:29,000
and Company building especially 
you feel like you have something

320
00:17:29,000 --> 00:17:31,300
to lose. 
It's like okay, we've this like 

321
00:17:31,300 --> 00:17:32,600
thing. 
That's Working and we could 

322
00:17:32,600 --> 00:17:34,800
build on it more iteratively or 
like. 

323
00:17:34,800 --> 00:17:37,500
Okay, let's like wait and see 
what happens with layer, 2 for 

324
00:17:37,500 --> 00:17:39,600
example. 
But instead we've just really 

325
00:17:39,600 --> 00:17:42,900
put our foot forward and be 
like, no, like we believe this 

326
00:17:42,900 --> 00:17:46,200
is the best technology and the 
best product that we can build 

327
00:17:46,300 --> 00:17:47,600
and I know we're going to talk 
about it later. 

328
00:17:47,600 --> 00:17:50,100
So I don't get too into it too 
much, but I think this is a 

329
00:17:50,200 --> 00:17:51,900
similar mentality. 
That's caused us. 

330
00:17:51,900 --> 00:17:55,800
Make a relatively controversial,
technology, choice, and our next

331
00:17:55,800 --> 00:17:58,700
version. 
It is too kind of abandon l2s 

332
00:17:58,700 --> 00:18:01,600
almost at the time when 
everybody is like finally hyped 

333
00:18:01,600 --> 00:18:06,000
on Em and move to our own 
blockchain but we can talk more 

334
00:18:06,000 --> 00:18:08,100
about that. 
So I think it's that mentality. 

335
00:18:08,100 --> 00:18:10,800
And then also just the 
experience and capability of our

336
00:18:10,800 --> 00:18:13,900
team to go out and execute on. 
A lot of these things that 

337
00:18:13,900 --> 00:18:15,600
really have never been done 
before in crypto. 

338
00:18:16,600 --> 00:18:19,100
Well, thanks so much. 
So I have kind of like to get 

339
00:18:19,100 --> 00:18:22,900
the sort of the corollary 
question on this one, what are 

340
00:18:22,900 --> 00:18:25,700
the biggest mistakes you made? 
And especially a mistakes where 

341
00:18:25,700 --> 00:18:29,400
you feel like, okay, here's like
deep lesson that you've learned 

342
00:18:29,500 --> 00:18:31,700
and something that you're 
approaching in a different way. 

343
00:18:31,800 --> 00:18:34,900
Way now. 
Yeah, I think one of the biggest

344
00:18:34,900 --> 00:18:38,600
mistakes that we made was 
earlier on in the company and 

345
00:18:38,600 --> 00:18:41,100
again we were able to recover 
from it just because we were so 

346
00:18:41,100 --> 00:18:45,300
early in the space but back in 
2017. 

347
00:18:45,300 --> 00:18:49,000
Kind of the space just felt 
different like ico's were 

348
00:18:49,000 --> 00:18:52,600
rampant and basically what 
everybody was doing at the time 

349
00:18:52,600 --> 00:18:55,900
was publishing white papers, not
really building products, but 

350
00:18:55,900 --> 00:18:59,100
more publishing papers. 
And maybe I don't know if people

351
00:18:59,100 --> 00:19:01,700
like in crypto these days. 
Remember what IP papers. 

352
00:19:01,900 --> 00:19:03,800
Then our because, luckily, they 
fallen out of fashion. 

353
00:19:04,000 --> 00:19:08,400
But basically what white papers 
were, we're kind of long like 

354
00:19:08,400 --> 00:19:12,500
research based documents like an
academic paper, basically saying

355
00:19:12,500 --> 00:19:14,800
what you're going to go out and 
build these things would be like

356
00:19:14,800 --> 00:19:17,800
ridiculously complicated and the
way papers would basically be 

357
00:19:17,800 --> 00:19:20,600
like, okay, here's our like, 
50-page white paper and we're 

358
00:19:20,600 --> 00:19:23,500
going to build this whole thing.
It's going to be perfect and 

359
00:19:23,500 --> 00:19:25,400
then we're going to ride off 
into the sunset with this 

360
00:19:25,400 --> 00:19:27,500
perfect product. 
But that is not how product 

361
00:19:27,500 --> 00:19:31,500
development works. 
And I think we weren't as guilty

362
00:19:31,500 --> 00:19:34,300
of this this as some other 
people were, but we were guilty 

363
00:19:34,300 --> 00:19:37,900
of it to an extent to like there
was a dydx white paper early on 

364
00:19:38,300 --> 00:19:41,200
and kind of worse than that. 
I think we spent basically too 

365
00:19:41,200 --> 00:19:45,600
long building the first version 
or two of the dydx protocol. 

366
00:19:46,200 --> 00:19:49,900
I think the the first one took 
us about a year a little over to

367
00:19:49,900 --> 00:19:53,900
build which again is fast but we
have good developers and like 

368
00:19:53,900 --> 00:19:56,600
the problem with the first 
version was we just trying to 

369
00:19:56,600 --> 00:19:59,900
consider like every case we were
trying to build a really General

370
00:19:59,900 --> 00:20:03,000
protocol, General, meaning, 
Like, you could do a ton of 

371
00:20:03,000 --> 00:20:06,400
different types of things with 
it, rather than having a really 

372
00:20:06,400 --> 00:20:09,200
specific use case, for the 
product, and that caused us to 

373
00:20:09,208 --> 00:20:12,100
build a ton more features. 
And this is a really common 

374
00:20:12,100 --> 00:20:14,900
story, not just in crypto, but 
in product development in 

375
00:20:14,908 --> 00:20:18,200
general, often times you go out 
and you really excited about 

376
00:20:18,200 --> 00:20:21,600
something you build out the 
early version of the product 

377
00:20:21,600 --> 00:20:24,400
that you had way too many 
features to it and then it ends 

378
00:20:24,400 --> 00:20:27,100
up like, 90% of this features, 
you don't even need. 

379
00:20:27,700 --> 00:20:30,000
So you're like, why the heck, 
did I spend so much time 

380
00:20:30,000 --> 00:20:31,600
building this first version of 
the product? 

381
00:20:31,800 --> 00:20:35,500
But the story here is it's 
really important not to build 

382
00:20:35,500 --> 00:20:37,500
something kind of for the 
future. 

383
00:20:37,500 --> 00:20:42,300
But for right now and again, I 
think that kind of resonates 

384
00:20:42,300 --> 00:20:44,600
with the story. 
Even the founding story of dydx 

385
00:20:44,600 --> 00:20:47,800
that I told earlier, I think too
many people in crypto can a 

386
00:20:47,800 --> 00:20:51,200
build for too far into the 
future and that's not to say 

387
00:20:51,200 --> 00:20:53,300
that the future is not important
so that we shouldn't pay 

388
00:20:53,300 --> 00:20:55,800
attention to it. 
Because we are super early and 

389
00:20:55,800 --> 00:20:58,500
we need to know or at least have
some like guests about what the 

390
00:20:58,500 --> 00:21:01,200
future could hold it really 
impacts the decisions we make 

391
00:21:01,200 --> 00:21:03,100
right now. 
Now, but like that being said, 

392
00:21:03,100 --> 00:21:05,200
like the only thing that matters
when you're Building Products, 

393
00:21:05,200 --> 00:21:08,800
is building the best possible 
product for right now, or maybe 

394
00:21:08,800 --> 00:21:11,700
like for the lifecycle the next 
year or two of the product. 

395
00:21:11,900 --> 00:21:15,400
So I think fast forward to now, 
we have hopefully taken that 

396
00:21:15,400 --> 00:21:18,600
more to heart and are really 
trying to build again the best 

397
00:21:18,600 --> 00:21:22,200
possible product for right now. 
And I think we've learned our 

398
00:21:22,200 --> 00:21:23,200
lesson. 
Yeah. 

399
00:21:23,200 --> 00:21:27,400
I think what I wanted to talk 
about a little bit is kind of 

400
00:21:27,400 --> 00:21:32,600
the Competitor, almost 22. 
This order book design that that

401
00:21:32,600 --> 00:21:35,900
you kind of pursued a more 
traditional look that definitely

402
00:21:35,900 --> 00:21:39,200
also had like a big success 
moment with unity swap. 

403
00:21:39,200 --> 00:21:43,300
So basically automated market 
makers or AMS at probably at 

404
00:21:43,300 --> 00:21:46,000
that time where I'd when you 
were building the first or 

405
00:21:46,000 --> 00:21:49,500
second version of dydx, they 
really took off because that was

406
00:21:49,500 --> 00:21:54,800
kind of something that seems 
like needed at that time for in 

407
00:21:54,800 --> 00:21:58,900
crypto now, I guess. 
Yeah, it seems though that A lot

408
00:21:58,900 --> 00:22:02,300
of things like M&M's came about 
because of the limitations I 

409
00:22:02,308 --> 00:22:06,500
guess of the of the blockchains 
to scale for order book. 

410
00:22:08,000 --> 00:22:10,900
I guess what I wanted to ask is 
like what's your general 

411
00:22:10,900 --> 00:22:14,200
thoughts or kind of a MMS? 
How do you see them? 

412
00:22:14,200 --> 00:22:18,000
Is it like kind of something 
that's just there in passing 

413
00:22:18,000 --> 00:22:19,400
until everything is like order 
book base? 

414
00:22:19,400 --> 00:22:24,000
Or do you think they have like a
space in the in the ecosystem? 

415
00:22:24,300 --> 00:22:26,700
I definitely do think they have 
a space long term in the 

416
00:22:26,700 --> 00:22:29,600
ecosystem? 
I maybe not Be proven is too 

417
00:22:29,600 --> 00:22:32,500
strong of a word, but I think 
that the success of Yuna Swap 

418
00:22:32,500 --> 00:22:35,700
and a lot of the other ones at 
this point has proven that they 

419
00:22:35,700 --> 00:22:39,500
are really useful and they are 
here to say, but I think there 

420
00:22:39,500 --> 00:22:42,300
are going to targeted at 
different use cases than order 

421
00:22:42,300 --> 00:22:45,000
books, and I want to take it 
back to when I my previous 

422
00:22:45,000 --> 00:22:46,900
answer is in terms of answering 
the question. 

423
00:22:46,900 --> 00:22:49,400
Why are we building order books 
rather than a MMS? 

424
00:22:49,400 --> 00:22:51,800
And I think it really starts 
with the users that we're 

425
00:22:51,800 --> 00:22:56,300
targeting again, specifically, 
the crypto institutional Traders

426
00:22:56,300 --> 00:22:59,800
and the crypto prosumer Traders 
and And these Traders really 

427
00:22:59,800 --> 00:23:02,800
demands again, like, I was 
mentioning before some of the 

428
00:23:02,800 --> 00:23:06,000
more advanced trading features 
things, like, limit orders 

429
00:23:06,000 --> 00:23:10,000
things, like stop orders Market,
orders, and all of that, and you

430
00:23:10,008 --> 00:23:13,200
can really only get those things
on an order book at least as 

431
00:23:13,200 --> 00:23:17,100
kind of a First-Class citizen. 
Also Traders, really demand kind

432
00:23:17,100 --> 00:23:20,300
of really deep liquidity and 
just like a lot of these trading

433
00:23:20,300 --> 00:23:23,100
firms are not going to be so 
much out there. 

434
00:23:23,300 --> 00:23:27,000
At least like market-making on 
automated market makers as they 

435
00:23:27,000 --> 00:23:30,400
are on order. 
Looks so it was really again, 

436
00:23:30,400 --> 00:23:34,900
kind of deciding what our goal 
is and our goal at dydx is to 

437
00:23:34,900 --> 00:23:38,300
eventually meaning far into the 
future maybe like five plus 

438
00:23:38,300 --> 00:23:40,600
years from now. 
Become one of the biggest 

439
00:23:40,600 --> 00:23:44,900
exchanges or exchange protocols 
in crypto and really not be 

440
00:23:44,900 --> 00:23:48,100
satisfied with just going to 
being relegated to some Niche, 

441
00:23:48,100 --> 00:23:50,000
markets and crypto. 
And I think that's really 

442
00:23:50,000 --> 00:23:51,800
informed what we've done in a 
big way. 

443
00:23:52,100 --> 00:23:54,700
We're quite literally tackling 
the biggest markets in crypto 

444
00:23:54,800 --> 00:23:57,800
like just Bitcoin Perpetual 
trading and crypto is like 

445
00:23:57,800 --> 00:23:59,800
almost 50. 
Percent of the entire crypto 

446
00:23:59,800 --> 00:24:02,200
trading market. 
So kind of by definition if you 

447
00:24:02,200 --> 00:24:04,400
want to be one of the biggest 
crypto trading firms, you have 

448
00:24:04,400 --> 00:24:07,300
to play in the biggest markets 
and we feel this the product 

449
00:24:07,300 --> 00:24:10,400
experience that we need to play 
in those markets and kind of 

450
00:24:10,400 --> 00:24:13,300
Target the users that at least 
right now are forming the bulk 

451
00:24:13,300 --> 00:24:16,200
of the crypto trading volume. 
I think M&M's can be really 

452
00:24:16,200 --> 00:24:20,300
useful specifically, they have 
been really useful in a lot of 

453
00:24:20,300 --> 00:24:23,500
ways on providing liquidity and 
more long tail markets and I 

454
00:24:23,508 --> 00:24:26,500
think that is really important 
and that's something that was 

455
00:24:26,500 --> 00:24:29,800
uniquely enabled by yunus. 
Whopping Another M&M's. 

456
00:24:30,400 --> 00:24:33,900
So it's definitely something 
we're tracking long-term and I'm

457
00:24:33,900 --> 00:24:37,000
not saying in any way that like 
order books or M&M's are like 

458
00:24:37,000 --> 00:24:38,800
objectively better than the 
other ones. 

459
00:24:39,800 --> 00:24:42,400
Like, I think it's possible it 
someday like you could even see 

460
00:24:42,400 --> 00:24:45,800
in a MM on dydx for not 
currently building that, but I'm

461
00:24:45,800 --> 00:24:48,700
certainly open to it long term. 
I think they just kind of serve 

462
00:24:48,700 --> 00:24:52,000
different use cases and again 
the the use case and 

463
00:24:52,000 --> 00:24:54,300
specifically, the users that 
we're targeting right now. 

464
00:24:54,600 --> 00:24:58,600
I think in order book is a much 
better fit for them and also So 

465
00:24:58,600 --> 00:25:01,000
like one of the challenges with 
building order books on a 

466
00:25:01,000 --> 00:25:04,700
decentralized exchange is from a
technical perspective order 

467
00:25:04,700 --> 00:25:08,300
books, require much much higher 
throughput than automated market

468
00:25:08,300 --> 00:25:10,300
makers. 
Probably on the order of like 

469
00:25:10,300 --> 00:25:13,700
100 to 1000 times more through 
puts than automated 

470
00:25:13,700 --> 00:25:15,700
market-makers do. 
Because if you think about 

471
00:25:15,700 --> 00:25:18,400
what's actually happening on an 
order book, it's mostly just 

472
00:25:18,400 --> 00:25:22,000
market makers which are crypto 
trading firms, which are placing

473
00:25:22,000 --> 00:25:26,100
automated orders to trade on the
order book, but it's not humans 

474
00:25:26,100 --> 00:25:27,600
that are doing this. 
It's Bots. 

475
00:25:27,600 --> 00:25:31,000
And these Bots are Saying, 
multiples of orders per second, 

476
00:25:31,300 --> 00:25:35,000
oftentimes up to thousands of 
orders per second, and this is 

477
00:25:35,000 --> 00:25:37,200
just much higher throughput. 
So then kind of an automated 

478
00:25:37,200 --> 00:25:40,300
Market maker needs where with an
automated Market maker. 

479
00:25:40,300 --> 00:25:43,300
You just like click wants to 
deposit into your LP position. 

480
00:25:43,400 --> 00:25:46,000
That's basically it and that has
been one again. 

481
00:25:46,000 --> 00:25:49,200
One of the things that's driven 
a lot of the technical decisions

482
00:25:49,200 --> 00:25:52,700
that we've made with dydx. 
That's the biggest reason why we

483
00:25:52,700 --> 00:25:57,200
move to a layer 2 and also the 
biggest reason why on the 

484
00:25:57,200 --> 00:26:00,500
current version of dydx X, we 
operate kind of what's called a 

485
00:26:00,500 --> 00:26:03,500
hybrid exchange, where there's 
some centralized components to 

486
00:26:03,508 --> 00:26:05,600
The Exchange, and some 
decentralised components, 

487
00:26:06,000 --> 00:26:08,300
decentralized components, of 
course, being the smart 

488
00:26:08,300 --> 00:26:11,800
contracts, that custody user 
funds, and operate the protocol,

489
00:26:12,000 --> 00:26:14,300
but the centralized components 
being the order book. 

490
00:26:14,300 --> 00:26:16,600
And the main reason for this is 
because it requires really high 

491
00:26:16,600 --> 00:26:18,500
throughput. 
This is actually kind of the 

492
00:26:18,500 --> 00:26:21,300
main thing that we're solving 
and dyd X V4, where we're 

493
00:26:21,300 --> 00:26:25,300
building kind of the very first 
decentralized, but off chain 

494
00:26:25,300 --> 00:26:30,100
order book that can serve on the
order of Thousands order places 

495
00:26:30,100 --> 00:26:33,300
and cancellations per second and
we're really only able to do 

496
00:26:33,300 --> 00:26:36,600
this because of the technical 
decision that we're making to 

497
00:26:36,600 --> 00:26:39,200
build on the cosmos chain. 
And yeah we can we can 

498
00:26:39,200 --> 00:26:41,400
definitely go a lot more into 
that but I kind of stop there 

499
00:26:41,400 --> 00:26:43,200
for now. 
Let's do. 

500
00:26:43,200 --> 00:26:46,300
It's not this is perfect. 
That's let's go into that 

501
00:26:46,300 --> 00:26:48,400
decision. 
So you mentioned the 

502
00:26:48,400 --> 00:26:53,400
decentralisation of this kind of
order book and matching where 

503
00:26:53,400 --> 00:26:57,600
they are other reasons for this 
witch or was this the main one? 

504
00:26:58,300 --> 00:26:59,900
I'd say that's probably the main
one. 

505
00:27:00,000 --> 00:27:03,300
I think there are definitely all
their positive trade-offs for 

506
00:27:03,400 --> 00:27:06,900
building your own chain. 
Probably the biggest other 

507
00:27:06,900 --> 00:27:09,300
Advantage, besides just the 
order book, which I'll talk more

508
00:27:09,300 --> 00:27:13,200
about, is the sovereignty of the
chain, which kind of sounds like

509
00:27:13,200 --> 00:27:15,800
a fancy word. 
But basically, it means that the

510
00:27:15,800 --> 00:27:18,800
entire chain is yours Fred. 
So you can do whatever you want 

511
00:27:18,800 --> 00:27:20,100
with it. 
It's like you can have the 

512
00:27:20,100 --> 00:27:24,300
validators, do different jobs, 
you can have their incentives. 

513
00:27:24,300 --> 00:27:27,000
Be different. 
Like their incentives are more 

514
00:27:27,000 --> 00:27:30,700
aligned with the All right, 
because on aetherium, like 

515
00:27:30,700 --> 00:27:34,200
there's no notion that etherium 
validator should care about like

516
00:27:34,200 --> 00:27:36,400
Eunice loppers. 
You see, slopper, like whatever 

517
00:27:36,400 --> 00:27:38,300
else is, like tons of stuff 
running on the Chain, right? 

518
00:27:38,900 --> 00:27:42,700
But on our own chain it's like 
all the validators are dydx 

519
00:27:42,700 --> 00:27:45,500
validators. 
And just as an example that 

520
00:27:45,500 --> 00:27:48,300
actually can help you if you're 
trying to solve certain things 

521
00:27:48,300 --> 00:27:51,900
like dealing with Mev for 
example, but back to the 

522
00:27:51,900 --> 00:27:55,600
connect, critical portion of the
decision, it really was what I 

523
00:27:55,608 --> 00:27:59,200
was mentioning in terms of the 
throughput than Needed to serve 

524
00:27:59,200 --> 00:28:01,800
this products that we felt like 
we needed to build and 

525
00:28:01,900 --> 00:28:04,800
decentralized order book and 
kind of the decision as we 

526
00:28:04,800 --> 00:28:08,200
thought through it. 
So we effectively wanted to 

527
00:28:08,200 --> 00:28:11,200
replicate what we have right now
more or less and improve on it 

528
00:28:11,200 --> 00:28:13,600
hopefully but replicate it for 
the most part. 

529
00:28:13,600 --> 00:28:17,100
But in a fully decentralized way
that was always really core to 

530
00:28:17,100 --> 00:28:19,700
the ethos of what we're building
and was always the plan. 

531
00:28:20,400 --> 00:28:24,100
So we took we kind of look that 
we have what we have right now 

532
00:28:24,100 --> 00:28:28,000
and we saw okay on dyd X V3. 
There are currently about About 

533
00:28:28,000 --> 00:28:31,800
1000 order places and 
cancellations per second and 

534
00:28:31,800 --> 00:28:34,100
actually if you kind of look 
into the future with some of our

535
00:28:34,100 --> 00:28:36,700
Ambitions, that's pretty low for
an exchange. 

536
00:28:36,700 --> 00:28:39,200
Like if you look at something 
like a by Nance, I'm sure 

537
00:28:39,200 --> 00:28:42,100
they're throughput is orders of 
magnitude higher than that. 

538
00:28:42,100 --> 00:28:44,700
But at least for right now, 
let's like try to be satisfied 

539
00:28:44,700 --> 00:28:47,400
with a thousand operations per 
second and again kind of 

540
00:28:47,400 --> 00:28:50,900
replicating the performance that
we have and uid xv3 right now. 

541
00:28:51,600 --> 00:28:55,400
We took a look around and we 
really keep an open mind about 

542
00:28:55,400 --> 00:28:57,200
what technology we're building 
on. 

543
00:28:57,200 --> 00:29:00,400
Which Some reason is like, kind 
of controversial and crypto, 

544
00:29:00,400 --> 00:29:03,600
which I don't understand, but 
it's like we really don't care 

545
00:29:03,600 --> 00:29:05,300
like what technology we're 
building on. 

546
00:29:05,300 --> 00:29:07,600
We just like, want to build a 
great product. 

547
00:29:07,600 --> 00:29:09,800
So anyways, we took a look 
around at all the different 

548
00:29:09,800 --> 00:29:10,900
chains. 
We could build on. 

549
00:29:11,500 --> 00:29:13,300
We looked at things like Stark, 
net. 

550
00:29:13,300 --> 00:29:17,000
We look at things like, 
optimism, like Solana obviously 

551
00:29:17,000 --> 00:29:20,900
like Cosmos, even other chains. 
And the core question we were 

552
00:29:20,900 --> 00:29:26,600
asking is, can this given chain 
support the throughput that we 

553
00:29:26,600 --> 00:29:29,000
need? 
And ideally support. 

554
00:29:29,000 --> 00:29:32,500
This through puts with really 
low, we're ideally no gas fees 

555
00:29:32,500 --> 00:29:34,400
for placing and canceling orders
as well. 

556
00:29:34,700 --> 00:29:37,000
So again, if you think about the
use case that we're trying to 

557
00:29:37,300 --> 00:29:40,300
solve for it, it's really at 
least on the maker side for 

558
00:29:40,300 --> 00:29:43,300
market makers, to be able to 
cancel and place orders really 

559
00:29:43,300 --> 00:29:46,800
quickly and cheaply. 
So we took a look around and we 

560
00:29:46,800 --> 00:29:50,800
were like none of them can even 
close to support like a thousand

561
00:29:50,800 --> 00:29:52,600
places in canceller like 
transactions. 

562
00:29:52,600 --> 00:29:57,800
Basically for a second with low 
gas fees, I think L 2. 

563
00:29:58,000 --> 00:29:59,800
Right now, have a lot of promise
and I do you think they'll 

564
00:29:59,800 --> 00:30:02,900
improve a lot long-term but 
again to pull back from one of 

565
00:30:02,900 --> 00:30:05,600
the things I said before, really
the thing that we want to do is 

566
00:30:05,600 --> 00:30:07,500
not build for like five years 
from now. 

567
00:30:07,700 --> 00:30:10,900
It's the build for now and like 
the next year or two and 

568
00:30:10,900 --> 00:30:14,700
currently l2s aren't really able
to support you know that order 

569
00:30:14,700 --> 00:30:16,700
of transactions per second. 
It's more like if you just 

570
00:30:16,700 --> 00:30:19,200
literally go and look like this 
publicly available information 

571
00:30:19,200 --> 00:30:21,200
like the transactions per 
second. 

572
00:30:21,200 --> 00:30:25,200
So if like optimism and Stark 
net is kind of on the double 

573
00:30:25,200 --> 00:30:27,700
digits, rather than like the the
triple digits, right? 

574
00:30:27,900 --> 00:30:31,300
Right now, suffice to say and 
Solana, like was a contender, 

575
00:30:31,300 --> 00:30:33,500
and we did sort of a seriously 
consider that. 

576
00:30:33,600 --> 00:30:34,900
I know. 
There's a lot of like Solana 

577
00:30:34,900 --> 00:30:37,700
Fudd right now, but for what, 
it's worth my two cents is that 

578
00:30:37,700 --> 00:30:42,000
Solana is really novel, an 
important technology that is 

579
00:30:42,000 --> 00:30:45,200
working really well. 
And it certainly legit and 

580
00:30:45,200 --> 00:30:47,600
something that we considered, 
and they can support a really 

581
00:30:47,600 --> 00:30:50,800
high amount of transactions on 
their layer one right now. 

582
00:30:51,100 --> 00:30:53,900
But I think the whole chain is 
roughly around a thousand 

583
00:30:53,900 --> 00:30:56,900
transactions per second, and we 
don't have all of the chain to 

584
00:30:56,900 --> 00:30:59,900
ourselves. 
That wasn't really a huge option

585
00:30:59,900 --> 00:31:01,800
either. 
So we kind of looked at building

586
00:31:01,800 --> 00:31:05,500
our own chain and it's not so 
much that Cosmos in and of 

587
00:31:05,500 --> 00:31:09,100
itself is way more scalable. 
It's actually not it's probably 

588
00:31:09,400 --> 00:31:13,000
on the supports on the order of 
like tens of transactions per 

589
00:31:13,000 --> 00:31:15,900
second which is pretty Far Cry 
from a thousand transactions per

590
00:31:15,900 --> 00:31:19,900
second, but it's this core 
concept that we gain in 

591
00:31:19,900 --> 00:31:23,500
sovereignty that really unlocks 
building things that are new and

592
00:31:23,500 --> 00:31:26,700
the new thing that we're 
building is a decentralized but 

593
00:31:26,700 --> 00:31:30,100
off chain ordered, Look, it's 
effectively an order book that 

594
00:31:30,100 --> 00:31:34,100
doesn't exist on chain but does 
exist in the network of the 

595
00:31:34,100 --> 00:31:36,500
validators. 
It's kind of similar to like you

596
00:31:36,500 --> 00:31:40,600
know when you send a transaction
and it sits in the men pool for 

597
00:31:40,600 --> 00:31:43,400
a while, before being committed 
to the blockchain, it's 

598
00:31:43,400 --> 00:31:47,400
effectively using like a mempool
like structure to store the 

599
00:31:47,400 --> 00:31:51,000
order book, but it's cool 
because the mempool is way 

600
00:31:51,000 --> 00:31:54,000
higher throughput like orders of
magnitude higher throughput than

601
00:31:54,000 --> 00:31:57,400
consensus of the core chain and 
you don't have to pay gas for 

602
00:31:57,400 --> 00:32:00,100
it, which Sweet. 
Like you only have to pay gas 

603
00:32:00,100 --> 00:32:03,900
when things are included on the 
Chain but that's totally fine. 

604
00:32:03,900 --> 00:32:08,000
And things are only included on 
the chain for dydx fee for when 

605
00:32:08,000 --> 00:32:10,500
a match happens. 
So it's kind of like this unique

606
00:32:10,500 --> 00:32:13,900
product that we had where I like
the transactions by far the most

607
00:32:13,900 --> 00:32:16,900
popular ones are just placing 
and canceling orders but only 

608
00:32:16,900 --> 00:32:19,800
about one percent or less of the
orders that get placed actually 

609
00:32:19,800 --> 00:32:22,000
match. 
So if you kind of map that to 

610
00:32:22,000 --> 00:32:24,500
the throughput that we have 
with, like the mempool, which is

611
00:32:24,500 --> 00:32:27,700
like thousands of transactions, 
per second, you know? 

612
00:32:27,800 --> 00:32:30,200
Oh, that's totally fine. 
That satisfies our thousand 

613
00:32:30,200 --> 00:32:32,700
transactions per second goal at 
least start. 

614
00:32:32,700 --> 00:32:36,200
And then map the actual matches 
that happen, which is on the 

615
00:32:36,200 --> 00:32:40,600
order of like 10 per second to 
the throughput constraints of 

616
00:32:40,600 --> 00:32:44,100
the on chain protocol, which is 
like on the orders of 10 per 

617
00:32:44,100 --> 00:32:47,300
seconds tens per second that 
works as well. 

618
00:32:47,500 --> 00:32:50,600
So that's effectively what we're
building in dyd X V4. 

619
00:32:50,900 --> 00:32:53,800
It's something that's pretty 
novel and I don't think at least

620
00:32:53,800 --> 00:32:57,000
has been built or at least been 
used at scale and in a 

621
00:32:57,008 --> 00:32:59,200
production way. 
Are so we're pretty excited 

622
00:32:59,200 --> 00:33:02,000
about it. 
We're getting pretty far into 

623
00:33:02,000 --> 00:33:04,800
the development process of dydx 
fee for. 

624
00:33:04,800 --> 00:33:08,400
We have an internal test net 
version, that's up and working, 

625
00:33:08,400 --> 00:33:11,600
and for placing orders on it. 
There's still a good bit more to

626
00:33:11,600 --> 00:33:16,600
build, but we're pretty excited 
about what exists so far and 

627
00:33:16,600 --> 00:33:19,200
what it'll be able to launch 
with, at some point. 

628
00:33:19,800 --> 00:33:24,400
And I'm curious, what are they 
the other implications of having

629
00:33:24,400 --> 00:33:27,700
validators run this matching 
engine, you know? 

630
00:33:27,800 --> 00:33:31,600
Aside from now it's no longer 
one company but it's like a 

631
00:33:31,600 --> 00:33:34,200
bunch of different entities. 
But like you know what are the 

632
00:33:34,200 --> 00:33:39,800
kind of other may be positive or
negative side effects of that? 

633
00:33:40,500 --> 00:33:42,900
Yeah, I mean, I guess it depends
in terms of what you're 

634
00:33:42,900 --> 00:33:46,000
comparing it to. 
So obviously it's like way more 

635
00:33:46,000 --> 00:33:50,800
decentralized than what exists 
on dyd X V3 right now obviously 

636
00:33:50,800 --> 00:33:54,600
way more decentralized than 
decentralized exchange and I 

637
00:33:54,600 --> 00:33:56,600
think there are a lot of 
different aspects to it and one 

638
00:33:56,600 --> 00:34:00,200
aspect is Who are the validators
and how many of them are there? 

639
00:34:00,200 --> 00:34:03,400
And like how decentralized is 
that Network that network is 

640
00:34:03,400 --> 00:34:06,000
certainly not going to be as 
decentralized as like the 

641
00:34:06,000 --> 00:34:08,600
validator set of etherium 
itself. 

642
00:34:09,199 --> 00:34:13,600
But I think it can be much more 
decentralized than kind of at 

643
00:34:13,600 --> 00:34:15,400
least my censorship resistance 
perspective. 

644
00:34:15,400 --> 00:34:18,699
Then kind of the the sequencer 
is that exists on like Al to. 

645
00:34:18,900 --> 00:34:21,199
So I think we can get to a 
really good level of 

646
00:34:21,199 --> 00:34:25,500
decentralization to start in 
something that will only improve

647
00:34:25,500 --> 00:34:27,699
and grow over time hopefully as 
the protocol. 

648
00:34:27,800 --> 00:34:29,900
Continues. 
Increasing in volume. 

649
00:34:29,900 --> 00:34:32,300
There's a lot of considerations,
right? 

650
00:34:32,300 --> 00:34:36,300
So you have to start worrying 
about Mev in a fairly big way 

651
00:34:36,300 --> 00:34:39,500
and that's not unique to dydx. 
I think that's a big 

652
00:34:39,500 --> 00:34:41,600
consideration on any 
decentralized exchange. 

653
00:34:41,600 --> 00:34:45,300
We're still looking a lot more 
into this from a research 

654
00:34:45,300 --> 00:34:48,600
perspective so I won't go too 
deep into it right now but I 

655
00:34:48,600 --> 00:34:51,600
think we do have some pretty 
interesting novel ideas and kind

656
00:34:51,600 --> 00:34:56,600
of the design space of Mev if 
you will, is a lot better and a 

657
00:34:56,600 --> 00:35:00,600
lot more open when Control the 
the validators themselves from 

658
00:35:00,600 --> 00:35:03,900
from like a network perspective.
So I think that gives us more 

659
00:35:03,900 --> 00:35:08,000
tools to be able to tackle MEP 
from like a protocol 

660
00:35:08,000 --> 00:35:10,100
perspective. 
So I think that's a pretty big 

661
00:35:10,100 --> 00:35:13,500
consideration. 
I think it's also probably a may

662
00:35:13,500 --> 00:35:16,500
be obvious but worth stating 
like when you build so this 

663
00:35:16,700 --> 00:35:19,400
matching engine and you build 
this order book and the entire 

664
00:35:19,400 --> 00:35:22,200
exchange. 
And this decentralized way you 

665
00:35:22,200 --> 00:35:25,000
get a lot of the benefits of 
decentralized exchanges in 

666
00:35:25,000 --> 00:35:27,600
general, in terms of things like
transparency. 

667
00:35:27,800 --> 00:35:29,300
I'll be order book entirely 
open. 

668
00:35:29,300 --> 00:35:30,900
Everybody can see what's on the 
order book. 

669
00:35:30,900 --> 00:35:34,800
It's like provable in terms of 
security, like the security of 

670
00:35:34,800 --> 00:35:37,300
the network is, you know, 
proportional to the 

671
00:35:37,300 --> 00:35:40,800
decentralization of the network.
Now, everybody can see the rules

672
00:35:40,800 --> 00:35:43,500
of the chain, everybody can see 
where the funds are. 

673
00:35:43,700 --> 00:35:46,800
So things like what happened on 
FTX would just literally be 

674
00:35:46,808 --> 00:35:49,600
impossible on an open protocol 
like this. 

675
00:35:49,800 --> 00:35:53,600
And then a lot of the really 
great access that you get with a

676
00:35:53,700 --> 00:35:57,300
decentralized exchange as well 
in terms of it's much easier to 

677
00:35:57,300 --> 00:35:59,700
use. 
From certain perspectives, it's 

678
00:35:59,700 --> 00:36:01,900
much easier to build things on 
top of it. 

679
00:36:02,200 --> 00:36:04,700
And you can kind of build this 
open network that others can 

680
00:36:04,700 --> 00:36:06,900
contribute to and can build on 
top of. 

681
00:36:07,200 --> 00:36:09,400
So, I think it's a really big 
step forwards. 

682
00:36:09,400 --> 00:36:13,200
And I think it's also unique in 
the sense that we're kind of 

683
00:36:13,207 --> 00:36:16,000
really directly trying to take 
on from a product perspective, 

684
00:36:16,000 --> 00:36:20,700
what exists on centralized 
exchanges, and I think we're 

685
00:36:20,800 --> 00:36:24,600
trailblazing like technology 
that hasn't existed before that 

686
00:36:24,600 --> 00:36:26,900
hopefully is making that more 
possible overtime. 

687
00:36:27,300 --> 00:36:31,000
And We're not intending for or 
even expecting for this to kind 

688
00:36:31,000 --> 00:36:35,100
of go out and be one of the 
biggest exchanges in the world 

689
00:36:35,100 --> 00:36:37,600
on day one, but I think it's a 
really good kind of building 

690
00:36:37,600 --> 00:36:41,800
block to move forwards with and 
we always have try to keep a 

691
00:36:41,808 --> 00:36:44,700
really long-term approach 
towards what we're building and 

692
00:36:44,700 --> 00:36:48,100
our goal is to you know from a 
protocol perspective become one 

693
00:36:48,100 --> 00:36:51,000
of the biggest exchanges more on
like a five to ten year time 

694
00:36:51,000 --> 00:36:53,600
Horizon but this is really the 
best possible product. 

695
00:36:53,600 --> 00:36:57,800
We feel we can build right now. 
So maybe is there another 

696
00:36:57,800 --> 00:37:01,000
question on this? 
So you said like you see the 

697
00:37:01,000 --> 00:37:04,000
causal chain scaling to, you 
know, like know tens of 

698
00:37:04,000 --> 00:37:08,200
transactions in terms of like, 
you know, unchanged transactions

699
00:37:08,200 --> 00:37:10,900
and then, you know, supporting 
kind of thousands 2000 

700
00:37:11,500 --> 00:37:15,900
transactions. 
How far do you think this can 

701
00:37:15,900 --> 00:37:19,600
scale with this solvent causal 
chain? 

702
00:37:20,000 --> 00:37:22,300
And what do you think are the 
most important? 

703
00:37:22,900 --> 00:37:28,300
I know, changes or directions. 
That You need to happen for, you

704
00:37:28,300 --> 00:37:30,300
know, to reach like a higher 
skill of it. 

705
00:37:31,300 --> 00:37:35,000
Yeah, so in terms of order of 
magnitude, I think there is 

706
00:37:35,000 --> 00:37:38,100
definitely like a 10x 
Improvement that we can get 

707
00:37:38,100 --> 00:37:42,100
probably both on chain and off 
chain, at least from just like 

708
00:37:42,400 --> 00:37:45,800
tuning things basically. 
So you have to went in computer 

709
00:37:45,800 --> 00:37:48,300
science in general. 
If you think about scalability, 

710
00:37:48,300 --> 00:37:50,700
you think about bottlenecks, 
okay? 

711
00:37:50,700 --> 00:37:53,800
Like what is the bottleneck 
that's causing, you know, my 

712
00:37:53,800 --> 00:37:57,800
maximum off chain? 
Order sent to the mempool to be 

713
00:37:57,800 --> 00:38:00,200
like 1,000 or 2,000 or whatever 
it is. 

714
00:38:00,600 --> 00:38:03,000
And I think one of the biggest 
things that we found so far 

715
00:38:03,100 --> 00:38:06,500
that's been a bottleneck, is the
message propagation, which 

716
00:38:06,500 --> 00:38:09,100
sounds like a fancy word. 
But it's basically like, okay 

717
00:38:09,100 --> 00:38:11,500
you have like a network of a 
bunch of validators, right? 

718
00:38:11,500 --> 00:38:14,000
And then when you send a 
transaction to the network, it 

719
00:38:14,000 --> 00:38:16,300
first gets sent to one of them 
but then it has to like 

720
00:38:16,300 --> 00:38:18,500
propagate to all the other ones 
and the network. 

721
00:38:18,500 --> 00:38:20,700
So it's like validators, sending
messages to each other, 

722
00:38:20,700 --> 00:38:24,900
basically, and that right now on
Cosmos uses a pretty standard 

723
00:38:24,900 --> 00:38:26,800
technology. 
On this is actually been one of 

724
00:38:26,800 --> 00:38:30,100
the big things we've noticed 
Solana has been focusing on to 

725
00:38:30,100 --> 00:38:32,800
achieve improvements and 
scalability is their message 

726
00:38:32,800 --> 00:38:34,800
propagation. 
So there's some learnings that 

727
00:38:34,800 --> 00:38:36,900
we can take from there. 
And somewhere means we can take 

728
00:38:36,900 --> 00:38:41,300
from elsewhere. 
And again, it's cool because we 

729
00:38:41,300 --> 00:38:43,100
can literally build, like, 
whatever you want, right? 

730
00:38:43,100 --> 00:38:45,300
Because we control the like what
we're building is like the 

731
00:38:45,300 --> 00:38:47,400
software that the validators 
run. 

732
00:38:47,800 --> 00:38:50,600
So we can change things like the
message propagation. 

733
00:38:50,900 --> 00:38:53,600
And I think that can is just one
example of something that can 

734
00:38:53,600 --> 00:38:55,500
lead to. 
I do exactly this. 

735
00:38:55,600 --> 00:38:58,000
To be a probably like, 
potentially a five to ten X 

736
00:38:58,000 --> 00:39:02,900
improvements in scalability 
things, like just improving the 

737
00:39:02,900 --> 00:39:07,600
CPU, usage of the validators 
themselves can improve a lot, 

738
00:39:07,600 --> 00:39:10,700
the on chain scalability. 
So there's a lot of different 

739
00:39:10,700 --> 00:39:13,400
levers that we have and a lot of
them are pretty technical. 

740
00:39:13,400 --> 00:39:16,700
Honestly pretty like, low-level 
programming but I think it's 

741
00:39:16,700 --> 00:39:19,000
cool. 
And again, similar to my answer 

742
00:39:19,000 --> 00:39:22,600
on, Mev, you just control a lot 
more of the stack so you have a 

743
00:39:22,600 --> 00:39:25,500
lot more things to play with in 
terms of improving. 

744
00:39:25,600 --> 00:39:28,000
Who puts over time? 
Awesome. 

745
00:39:28,100 --> 00:39:32,100
Yeah, I think, obviously, like 
also building this Cosmo 

746
00:39:32,100 --> 00:39:35,400
straight means you become kind 
of part of this Cosmos, IBC 

747
00:39:35,400 --> 00:39:39,100
ecosystem. 
I guess, first of all, maybe one

748
00:39:39,100 --> 00:39:42,000
question also, like, in terms of
your building like kind of 

749
00:39:42,000 --> 00:39:45,500
modifying the stack they were 
bit, is there also something 

750
00:39:45,500 --> 00:39:49,800
you're like that other Cosmos 
chains could use like from from 

751
00:39:49,800 --> 00:39:52,700
what you're building? 
Yeah. 

752
00:39:52,700 --> 00:39:56,500
So in terms of IBC for those who
aren't familiar, it's basically 

753
00:39:56,500 --> 00:40:00,300
a bridge more or less. 
That's kind of built into Cosmos

754
00:40:00,300 --> 00:40:03,100
natively, but it's fully 
decentralized. 

755
00:40:03,100 --> 00:40:06,200
It's much more secure than other
types of bridges just because 

756
00:40:06,200 --> 00:40:09,400
it's going to again Biltmore 
into the block chains themselves

757
00:40:09,400 --> 00:40:13,900
than kind of like on top of it. 
And we are integrating with IBC 

758
00:40:13,900 --> 00:40:16,800
in a big way. 
One of the exciting things that 

759
00:40:16,800 --> 00:40:22,600
we help to push for is a launch 
of native See on Cosmos and the 

760
00:40:22,600 --> 00:40:24,300
way that they're doing, this is 
kind of interesting there. 

761
00:40:24,300 --> 00:40:27,300
Basically building it a 
sovereign, their own Block 

762
00:40:27,300 --> 00:40:31,300
Chain, that will run u.s. 
DC and potentially other things 

763
00:40:31,300 --> 00:40:34,600
as well. 
But we can still on the dydx 

764
00:40:34,600 --> 00:40:37,900
Chain used this native USD. 
See, because you just IBC it 

765
00:40:37,900 --> 00:40:41,900
from the Native, What's called 
the noble chain that they're 

766
00:40:41,900 --> 00:40:46,800
building over to the dydx 10? 
It's also cool because one other

767
00:40:46,800 --> 00:40:49,200
example that we're literally 
building right now and probably 

768
00:40:49,200 --> 00:40:51,100
going to be using is for on 
board. 

769
00:40:51,400 --> 00:40:54,000
So you might ask her try to 
solve the product question, 

770
00:40:54,000 --> 00:40:58,000
like, how do you get USD see 
from aetherium to the dydx 

771
00:40:58,000 --> 00:40:59,900
chain? 
And we're going to integrate 

772
00:40:59,900 --> 00:41:05,400
with things, like Axl are to be 
able to do this but it's cool 

773
00:41:05,400 --> 00:41:08,700
because you can use axle are as 
a bridge, but at the end of the 

774
00:41:08,700 --> 00:41:12,000
whole thing, you can end up with
Native us DC, which is much more

775
00:41:12,000 --> 00:41:14,800
secure like you don't have to 
worry about like Bridge hacks or

776
00:41:14,800 --> 00:41:16,900
anything like that. 
And the way that we're doing 

777
00:41:16,900 --> 00:41:21,000
this is you effectively use like
Axl are to bridge it. 

778
00:41:21,200 --> 00:41:25,800
Cerium USD see to actually 
osmosis USD see, osmosis being 

779
00:41:25,800 --> 00:41:29,300
just a separate, Cosmos chain 
that operates the decks. 

780
00:41:29,800 --> 00:41:35,000
Then you do a swap on, osmosis 
has new stable swap feature for 

781
00:41:35,400 --> 00:41:39,800
Axl are u.s. d.c. to Native USD 
see which will also exist on 

782
00:41:39,800 --> 00:41:42,900
osmosis now. 
Like the user has native USBC, 

783
00:41:42,900 --> 00:41:47,800
then you use IBC to move that 
native USD see from osmosis over

784
00:41:47,800 --> 00:41:51,100
to the noble chain over to dydx 
and all the youth like the 

785
00:41:51,200 --> 00:41:52,800
Complicated. 
But all the user is really going

786
00:41:52,800 --> 00:41:56,200
to have to see or know for this 
is like you know, click deposit,

787
00:41:56,200 --> 00:41:58,700
like 10 USD, see and then like 
all this magic happens in the 

788
00:41:58,700 --> 00:42:02,500
background, basically, but it's 
again cool technology and I 

789
00:42:02,500 --> 00:42:06,000
think shows the power of 
composability with things like 

790
00:42:06,600 --> 00:42:09,200
Sovereign blockchains and I 
think this is a really good 

791
00:42:09,200 --> 00:42:13,100
early use cases but is there 
also use case that you would 

792
00:42:13,100 --> 00:42:18,200
like token ice some of the 
positions that people have on 

793
00:42:18,200 --> 00:42:21,000
dydx so that they can then maybe
use IVC. 

794
00:42:21,100 --> 00:42:23,300
Easy to, like, let's say if 
there's some sort of lending 

795
00:42:23,300 --> 00:42:25,900
chain or some other kind of 
chain and they want to like, 

796
00:42:26,200 --> 00:42:29,200
move it over and use as 
collateral or does that not work

797
00:42:29,200 --> 00:42:32,600
because you have to be able to 
liquidate on the dydx Chain 

798
00:42:32,600 --> 00:42:35,200
itself? 
It's possible like yeah, we've 

799
00:42:35,200 --> 00:42:38,000
considered that before, we 
probably won't build that 

800
00:42:38,000 --> 00:42:41,700
initially into the chain. 
But I think we've kind of talked

801
00:42:41,700 --> 00:42:45,700
about like dydx using other 
things that's made possible by 

802
00:42:45,700 --> 00:42:49,500
composability, and I think at 
least so far, we haven't been 

803
00:42:49,500 --> 00:42:53,700
quite as focused on like other. 
Things using dydx as like 

804
00:42:53,700 --> 00:42:55,200
building blocks for 
composability. 

805
00:42:55,500 --> 00:42:57,600
But that is something I'm 
excited about for the longer 

806
00:42:57,600 --> 00:42:59,200
term. 
It just hasn't really been a 

807
00:42:59,200 --> 00:43:02,400
major Focus right now and that's
still intentional because again 

808
00:43:02,400 --> 00:43:05,800
like if you like listen what I'm
saying and like the things I 

809
00:43:05,800 --> 00:43:07,800
talk about is like mostly like 
let's just build like great 

810
00:43:07,800 --> 00:43:10,900
product experience and like try 
to make it great for Traders on 

811
00:43:10,900 --> 00:43:13,600
dydx. 
So that's been our main focus. 

812
00:43:13,900 --> 00:43:16,600
I think one of the 
underappreciated parts of 

813
00:43:16,600 --> 00:43:20,000
composability with defy though, 
like people talk about like 

814
00:43:20,000 --> 00:43:22,400
Financial building Locks on 
chain. 

815
00:43:22,400 --> 00:43:24,800
And I think that is really cool.
Again, that may be a focus 

816
00:43:24,800 --> 00:43:27,100
longer term, but one of the 
things people don't talk about 

817
00:43:27,100 --> 00:43:30,800
as much is kind of the 
composability of just 

818
00:43:30,800 --> 00:43:34,200
applications that are built, 
like, front-ends basically that 

819
00:43:34,200 --> 00:43:37,600
are built on top of the apps, 
the decentralized apps 

820
00:43:37,600 --> 00:43:42,200
themselves. 
So things like the new data 

821
00:43:42,200 --> 00:43:44,800
browser inside coinbase. 
I think is a great example of 

822
00:43:44,800 --> 00:43:47,700
this where now you can use, you 
know, swap. 

823
00:43:47,900 --> 00:43:49,600
Hopefully, at some point you 
could use like you, why do you 

824
00:43:49,607 --> 00:43:52,200
ask from directly Side of 
coinbase. 

825
00:43:52,500 --> 00:43:54,900
And this is really something 
that's uniquely made possible 

826
00:43:54,900 --> 00:43:58,300
because the underlying building 
blocks are open and they're just

827
00:43:58,300 --> 00:44:02,000
technology. 
And now, coinbase has a unit 

828
00:44:02,000 --> 00:44:04,000
flop integration and this is 
unique, right? 

829
00:44:04,000 --> 00:44:05,700
This is like really 
fundamentally different than 

830
00:44:05,700 --> 00:44:08,400
what came before like 
point-based is not going to have

831
00:44:08,400 --> 00:44:10,800
like FTX or Finance integration,
right? 

832
00:44:10,800 --> 00:44:12,000
It's like those are all make 
sense. 

833
00:44:12,000 --> 00:44:15,100
They would just build the thing 
themselves but from like an 

834
00:44:15,100 --> 00:44:18,200
access perspective, it's really 
cool that a lot of these 

835
00:44:18,200 --> 00:44:20,300
decentralized apps are just 
codes. 

836
00:44:20,300 --> 00:44:23,300
They can be plugged. 
Ogden to from like a interface 

837
00:44:23,300 --> 00:44:26,200
perspective, into a lot of these
different types of products. 

838
00:44:26,200 --> 00:44:28,700
And I think that's personally, I
think that's going to be like, a

839
00:44:28,700 --> 00:44:30,900
big narrative over the next 
couple of years as well, and 

840
00:44:30,900 --> 00:44:33,800
something I'm excited about. 
Yeah, that's super interesting, 

841
00:44:33,800 --> 00:44:37,900
I guess, because right now, 
also, the main front end is kind

842
00:44:37,900 --> 00:44:41,800
of dydx trading, I guess. 
Yeah, people can interact with 

843
00:44:41,800 --> 00:44:45,200
this Cosmos chain or like the 
contracts there and then 

844
00:44:45,200 --> 00:44:48,600
integrate that, or how else do 
you like, do you imagine it 

845
00:44:48,600 --> 00:44:51,000
would be like other front-ends 
built by other parties. 

846
00:44:51,200 --> 00:44:54,700
And how do you kind of help 
people other front ends built by

847
00:44:54,700 --> 00:44:57,100
other parties for sure? 
And I think that will happen 

848
00:44:57,100 --> 00:45:00,900
again, like, with dydx fee, for 
all of the code that were 

849
00:45:00,900 --> 00:45:04,100
writing will be open source and,
you know, license to be 

850
00:45:04,100 --> 00:45:07,700
available by the effectively, 
like whoever wants to use it. 

851
00:45:07,900 --> 00:45:12,700
So, that means, like, even just 
for the, the front end that we 

852
00:45:12,700 --> 00:45:16,700
are other parties develop that 
will be open source. 

853
00:45:16,700 --> 00:45:19,700
And like, that could easily be 
plugged into or like white 

854
00:45:19,700 --> 00:45:22,800
labeled into some third. 
T application or like 

855
00:45:22,900 --> 00:45:27,200
independent, third party could 
host version of the front end, 

856
00:45:27,200 --> 00:45:30,700
there could be multiple versions
running and I think that 

857
00:45:30,700 --> 00:45:33,400
improves like access and 
censorship resistance. 

858
00:45:33,700 --> 00:45:37,200
So I think all these things 
definitely will happen and I 

859
00:45:37,207 --> 00:45:40,500
think they're again uniquely 
enabled by this concept that 

860
00:45:40,500 --> 00:45:42,900
it's just technology and it's 
just like open source code and 

861
00:45:42,900 --> 00:45:45,300
anybody can run, it's not like 
you need permission from us or 

862
00:45:45,300 --> 00:45:48,600
anybody else. 
I wanted to ask like one more 

863
00:45:48,600 --> 00:45:53,200
question on this whole like 
Cosmos chain L2 thing, I mean I 

864
00:45:53,200 --> 00:45:56,100
think you were very like clear 
take to it like sort of 

865
00:45:56,100 --> 00:46:01,100
explaining the you know your 
rationale and round the D 8 D by

866
00:46:01,100 --> 00:46:04,200
DX and how you guys need to have
decision from Curie. 

867
00:46:04,200 --> 00:46:08,100
And of course, right now this is
like big debate and I think I 

868
00:46:08,100 --> 00:46:10,500
have a sense at the moment. 
There's like some narrative 

869
00:46:10,500 --> 00:46:14,000
again, gaining momentum that, 
you know, he's is the settlement

870
00:46:14,000 --> 00:46:17,100
layer and it's the ultimate 
thing and the l2's. 

871
00:46:18,100 --> 00:46:20,700
And everything will be there. 
And, of course, you do have 

872
00:46:20,700 --> 00:46:24,200
also, this more thesis around, 
Sovereign chains. 

873
00:46:24,600 --> 00:46:28,800
So I'm curious, like how do you 
see this play out, and are there

874
00:46:28,800 --> 00:46:31,900
particular types of applications
or use cases? 

875
00:46:31,900 --> 00:46:35,600
Where you think they will be 
more fitting in one world or the

876
00:46:35,600 --> 00:46:38,700
other or do you think that 
there's more it's more going to 

877
00:46:38,700 --> 00:46:43,400
actually go into One Direction? 
Yeah, so I think maybe just 

878
00:46:43,400 --> 00:46:46,600
assuming a little bit like one 
thing that models a lot of these

879
00:46:46,600 --> 00:46:48,500
discussions. 
Ian's and I think causes people 

880
00:46:48,500 --> 00:46:50,400
to just yell at each other and 
say different things. 

881
00:46:50,400 --> 00:46:53,300
Basically is time Horizons in 
terms. 

882
00:46:53,300 --> 00:46:56,100
And what I mean by that is like,
okay, you can ask that question.

883
00:46:56,100 --> 00:46:59,000
But like what time Horizon are 
you asking that question on? 

884
00:46:59,300 --> 00:47:02,600
Are you asking, like, okay, what
should we literally use and 

885
00:47:02,600 --> 00:47:05,200
literally build if we want to 
build the best possible product 

886
00:47:05,200 --> 00:47:08,800
and a year or two from now, or 
are you asking what is crypto 

887
00:47:08,800 --> 00:47:10,800
going to look like 10 to 20 
years from now? 

888
00:47:10,800 --> 00:47:11,700
Those are very different 
questions. 

889
00:47:11,700 --> 00:47:14,700
I think again like the thing 
that we really care about in 

890
00:47:14,700 --> 00:47:17,000
terms of what we build right now
is the first one. 

891
00:47:17,200 --> 00:47:19,900
Terms of what can we literally? 
Use to build the best possible 

892
00:47:19,900 --> 00:47:23,900
product right now. 
And it just would have been in. 

893
00:47:24,100 --> 00:47:26,800
It's like, literally impossible 
for us to, like, build a product

894
00:47:26,800 --> 00:47:30,400
that we wanted to build on top 
of like an L2 for some of the 

895
00:47:30,400 --> 00:47:32,500
reasons that I talked about 
before. 

896
00:47:32,800 --> 00:47:35,800
And I'm not saying I'm not 
sitting here saying that like 

897
00:47:35,800 --> 00:47:37,500
everybody should build their own
Sovereign blockchain. 

898
00:47:37,500 --> 00:47:39,500
Like that's not at all the case,
like there are two if I were 

899
00:47:39,500 --> 00:47:42,500
building like a Yuna swap or 
like an NF T exchange or 

900
00:47:42,500 --> 00:47:45,500
something like that, I would 
definitely just build on like a 

901
00:47:45,500 --> 00:47:46,900
nice paste. 
L2. 

902
00:47:47,100 --> 00:47:50,100
Most definitely, and there's 
different use cases for 

903
00:47:50,100 --> 00:47:53,700
different things. 
And I think Roll-Ups do show a 

904
00:47:53,707 --> 00:47:56,300
lot of Promise. 
Long-term, I'm really excited 

905
00:47:56,300 --> 00:48:00,600
about like, Stark based Roll-Ups
long-term like, ZK, proofs, 

906
00:48:00,600 --> 00:48:03,300
basically. 
We're literally like the biggest

907
00:48:03,300 --> 00:48:06,400
user of them right now, in the 
world, I Corner the biggest use 

908
00:48:06,400 --> 00:48:09,700
case of like ZK proofs in the 
world by like transaction 

909
00:48:09,700 --> 00:48:13,200
volume, probably like anywhere. 
So I'm excited about them long 

910
00:48:13,200 --> 00:48:16,500
term and they're literally work 
but there is a lot of 

911
00:48:16,508 --> 00:48:20,900
limitations And I think one of 
the big narratives of crypto and

912
00:48:20,900 --> 00:48:24,600
I've been in crypto for like 
over 7 years at this point is 

913
00:48:24,600 --> 00:48:28,400
that things take longer than 
people think they're going to 

914
00:48:28,400 --> 00:48:32,000
take. 
And that causes people to kind 

915
00:48:32,000 --> 00:48:36,200
of get into this like hype and 
bossed mentality where it's 

916
00:48:36,200 --> 00:48:38,900
like, okay let's like take L to 
use as an example. 

917
00:48:39,700 --> 00:48:41,500
Yeah, they work right now. 
Like they're great. 

918
00:48:41,500 --> 00:48:44,100
Like we're using them. 
Are they everything like do they

919
00:48:44,100 --> 00:48:46,700
do everything like no, 
absolutely not like and are 

920
00:48:46,700 --> 00:48:48,900
there. 
Like answers to how we can make 

921
00:48:48,900 --> 00:48:51,000
them better long-term like yes, 
absolutely. 

922
00:48:51,700 --> 00:48:53,200
And great. 
People are working them like 

923
00:48:53,200 --> 00:48:55,300
Stark where and optimism and 
other teams. 

924
00:48:55,600 --> 00:48:58,500
But technology is really hard 
and it's like, especially 

925
00:48:58,500 --> 00:49:01,100
emerging technology is really 
hard and in those problems are 

926
00:49:01,100 --> 00:49:02,700
not going to be solved in the 
next year or two. 

927
00:49:02,700 --> 00:49:05,100
They're probably going to be 
solved in like five years or 10 

928
00:49:05,100 --> 00:49:08,700
years or maybe even 20 years 
from now for some of them. 

929
00:49:09,000 --> 00:49:12,200
So I think if you look at 
technology on different scales, 

930
00:49:12,200 --> 00:49:14,400
you come up with like different 
answers of like. 

931
00:49:14,400 --> 00:49:18,400
What's most likely to be the 
thing that Dominates long-term, 

932
00:49:18,700 --> 00:49:21,500
I think we've kind of seen and 
it's actually been surprising to

933
00:49:21,500 --> 00:49:24,400
me to this kind of narrative of,
okay? 

934
00:49:24,400 --> 00:49:27,300
Everybody like started on 
ethereum basically at least for 

935
00:49:27,300 --> 00:49:30,000
smart contracts and now there's 
been kind of this explosion. 

936
00:49:30,000 --> 00:49:35,700
So like a bunch of other chains.
Like there's polygon or Solana 

937
00:49:35,700 --> 00:49:37,400
Avalanche angle. 
There's like at least ten of 

938
00:49:37,400 --> 00:49:41,200
them that people use these days 
and I think that will continue 

939
00:49:41,200 --> 00:49:44,700
for probably the next year or 
two, maybe three at least. 

940
00:49:45,500 --> 00:49:48,300
And then I think we'll probably 
see, like, A consolidation more 

941
00:49:48,300 --> 00:49:51,500
towards like the ones that are 
really working long term, one of

942
00:49:51,508 --> 00:49:54,000
those winners going to be like, 
I don't know, like maybe I have 

943
00:49:54,000 --> 00:49:56,200
some opinions. 
Like I'm more excited about like

944
00:49:56,200 --> 00:49:59,600
ZK based Roll-Ups and 
potentially some optimistic 

945
00:49:59,600 --> 00:50:02,300
Roll-Ups than other things, but 
there are a lot of open 

946
00:50:02,300 --> 00:50:04,800
questions there, right? 
Let's just take like an obvious 

947
00:50:04,800 --> 00:50:07,300
one. 
Like actually roll ups, don't do

948
00:50:07,300 --> 00:50:09,900
very well on censorship 
resistance right now because 

949
00:50:09,900 --> 00:50:14,300
they use like centralized 
sequencer the sequencer sort of 

950
00:50:14,300 --> 00:50:16,700
being like this service 
basically. 

951
00:50:16,700 --> 00:50:21,200
That Runs the L to roll up and 
publishes the roll-up chain back

952
00:50:21,200 --> 00:50:22,700
to the base chain, like 
etherium. 

953
00:50:23,000 --> 00:50:26,700
But for all of them, basically, 
there's only one right now for 

954
00:50:26,700 --> 00:50:29,500
like, optimism and Stark that, 
and that's a problem. 

955
00:50:29,500 --> 00:50:33,600
And it's like people are working
on solving that like I talked to

956
00:50:33,600 --> 00:50:36,000
Star for about this, talk to 
optimism about it. 

957
00:50:36,300 --> 00:50:38,300
It's hard problems. 
It's probably going to take like

958
00:50:38,300 --> 00:50:41,800
some amount of years, but if you
think about well, okay, from 

959
00:50:41,800 --> 00:50:45,800
like you, idx, this perspective,
we really care about Open Access

960
00:50:45,800 --> 00:50:49,600
and censorship resistance And so
you know we actually think in a 

961
00:50:49,607 --> 00:50:52,900
lot of ways like what we're 
building on dydx V4 is going to 

962
00:50:52,900 --> 00:50:57,300
be more decentralized from like 
an access perspective than if we

963
00:50:57,300 --> 00:51:01,100
were building on like an L2 with
the centralized sequencer again.

964
00:51:01,100 --> 00:51:02,300
Is that going to be the case 
forever? 

965
00:51:02,300 --> 00:51:05,600
Like no probably not but like 
that's functionally the reality 

966
00:51:05,600 --> 00:51:07,300
of what we're building on right 
now. 

967
00:51:08,100 --> 00:51:10,500
So I think it's important to 
just kind of take a step back 

968
00:51:10,500 --> 00:51:13,200
and like think about like 
different time scales when 

969
00:51:13,200 --> 00:51:16,200
you're asking these questions as
well and I feel like most people

970
00:51:16,200 --> 00:51:18,500
don't do that. 
Yeah, I think it's super 

971
00:51:18,500 --> 00:51:22,600
interesting that you guys have 
been like remaining so adaptable

972
00:51:22,600 --> 00:51:25,000
and kind of switch through the 
versions like you can even see 

973
00:51:25,000 --> 00:51:27,400
it, right? 
That's now before and it sounds 

974
00:51:27,400 --> 00:51:31,900
like you're not kind of saying 
that there couldn't be like V5, 

975
00:51:31,900 --> 00:51:34,300
obviously, and something else. 
That obviously, there's always, 

976
00:51:34,300 --> 00:51:39,000
like, some sort of migration 
involved from the previous 

977
00:51:39,000 --> 00:51:41,000
product. 
Can you maybe expand a bit, how 

978
00:51:41,000 --> 00:51:43,600
it will be and be three. 
I guess it will keep running. 

979
00:51:43,600 --> 00:51:48,200
And we for will come up and 
maybe also Like how you plan to 

980
00:51:48,207 --> 00:51:50,900
do this migration? 
But also maybe some sort of tips

981
00:51:50,900 --> 00:51:53,400
of how to like do such a 
migration. 

982
00:51:53,400 --> 00:51:57,000
For other people building may be
on the wrong stack right now. 

983
00:51:57,000 --> 00:51:59,400
They want to like do a similar 
thing but you have learned doing

984
00:51:59,400 --> 00:52:02,400
it for so many times already. 
Yeah, I mean, I think there's 

985
00:52:02,400 --> 00:52:06,300
different approaches to it. 
I'm more a fan of not so much 

986
00:52:06,300 --> 00:52:09,900
like forced migrations from one 
products or protocol to another 

987
00:52:09,900 --> 00:52:12,800
protocol but more just kind of 
like launching the other 

988
00:52:12,800 --> 00:52:16,300
protocol and then people can 
migrate to the new one if they 

989
00:52:16,300 --> 00:52:17,300
choose to do. 
Uso. 

990
00:52:17,300 --> 00:52:19,900
And I think this is similar in 
kind of akin to how like, a 

991
00:52:19,908 --> 00:52:23,900
Eunice Lobby 3 verse like, you 
know, swop, V2 was launched and 

992
00:52:23,900 --> 00:52:26,100
that's going to be a similar 
approach to what we take with 

993
00:52:26,100 --> 00:52:28,500
you. 
I dxv for as well. 

994
00:52:29,300 --> 00:52:33,600
So, do ID X V3 will continue to 
operate for a while, at least 

995
00:52:34,200 --> 00:52:37,000
and then dydx before. 
Well, it's some point be 

996
00:52:37,000 --> 00:52:39,400
launched, and then these things 
will probably run in parallel 

997
00:52:39,400 --> 00:52:42,600
for some amount of time. 
There will be some process by 

998
00:52:42,600 --> 00:52:46,800
which you could move your funds 
from dydx, be 32 dyd x V4. 

999
00:52:47,100 --> 00:52:49,900
And it touched on that a little 
bit with the deposit and like, 

1000
00:52:49,900 --> 00:52:52,400
the bridging process, I was 
talking about earlier. 

1001
00:52:53,500 --> 00:52:56,700
But I think that's kind of been.
The best practice is just to 

1002
00:52:56,900 --> 00:53:00,400
allow users to use. 
Both, don't so much worry about 

1003
00:53:00,400 --> 00:53:03,500
like migrating, like, a live 
system because both number one, 

1004
00:53:03,500 --> 00:53:05,600
that's actually really, really 
hard to do from a technical 

1005
00:53:05,600 --> 00:53:08,100
perspective. 
Like if we take an example of, 

1006
00:53:08,100 --> 00:53:11,500
like, the etherium merge, 
actually, like they didn't run 

1007
00:53:11,500 --> 00:53:14,100
both in parallel, they just 
like, literally upgraded all of 

1008
00:53:14,100 --> 00:53:18,400
aetherium at once to use it. 
Seeing proofs take over proof of

1009
00:53:18,400 --> 00:53:21,600
works as a separate example, but
I think a lot of the technical 

1010
00:53:21,600 --> 00:53:24,200
complexity and the reason it 
took so long was because they 

1011
00:53:24,200 --> 00:53:28,000
tried to upgrade an In-Place 
system, not saying that was 

1012
00:53:28,000 --> 00:53:29,700
necessarily the wrong choice for
them. 

1013
00:53:29,700 --> 00:53:31,300
Like, you would have been really
complicated, right? 

1014
00:53:31,300 --> 00:53:34,200
If there are two versions of 
etherium running, but it does 

1015
00:53:34,200 --> 00:53:37,100
make it harder. 
So, yeah, it's going to be two 

1016
00:53:37,100 --> 00:53:40,200
versions running in parallel 
with hopefully some good product

1017
00:53:40,200 --> 00:53:41,800
experience for moving funds 
over. 

1018
00:53:42,800 --> 00:53:44,600
Yeah, totally cool and then I 
guess. 

1019
00:53:44,600 --> 00:53:46,400
Yeah. 
What's interesting right there 

1020
00:53:46,400 --> 00:53:52,100
is the dydx to obviously and 
that will probably, I mean, it 

1021
00:53:52,100 --> 00:53:55,700
already has like certain utility
and I guess that utility will 

1022
00:53:55,700 --> 00:53:59,700
extend. 
When you transition to V4, can 

1023
00:53:59,700 --> 00:54:03,000
you talk a little bit about? 
You know, what's the Toten 

1024
00:54:03,400 --> 00:54:06,100
currently used for? 
How will it play with? 

1025
00:54:06,100 --> 00:54:09,800
We for like yeah, I will 
interact there. 

1026
00:54:10,300 --> 00:54:13,700
Yeah, so the main thing the 
token is He is Farah is as a 

1027
00:54:13,707 --> 00:54:18,700
governance token on the dyd X V3
protocol and similar to a lot of

1028
00:54:18,707 --> 00:54:21,800
other D5 protocols, right. 
Where anybody can put forward a 

1029
00:54:21,800 --> 00:54:25,700
governance proposal people can 
vote on it and that's been going

1030
00:54:25,700 --> 00:54:27,900
on in a big way. 
And dyd X V3. 

1031
00:54:27,900 --> 00:54:31,000
Right now actually is a little 
bit of an aside, like one of the

1032
00:54:31,000 --> 00:54:34,000
cool things that's been 
happening on on dydx fiii with 

1033
00:54:34,000 --> 00:54:37,800
the token is pretty active 
governance actually, and it's 

1034
00:54:37,800 --> 00:54:41,500
been cool because a lot of these
trading firm type users that I 

1035
00:54:41,500 --> 00:54:44,400
was talking about before. 
Or have been playing a huge role

1036
00:54:44,400 --> 00:54:47,500
in governance as well. 
And I think that's something 

1037
00:54:47,500 --> 00:54:50,800
that's been exciting and I think
we'll continue to operate 

1038
00:54:50,800 --> 00:54:52,900
farther into the future. 
And this is cool concept for a 

1039
00:54:52,900 --> 00:54:56,500
like, if this exchange of this 
exchange protocol, can be 

1040
00:54:56,500 --> 00:55:00,900
controlled by the, the users of 
the platform rather than like an

1041
00:55:00,900 --> 00:55:03,300
independent third party, like 
some random company. 

1042
00:55:03,600 --> 00:55:07,100
That's like a fundamentally New 
Concept and I think we'll just 

1043
00:55:07,100 --> 00:55:09,900
align incentives. 
A lot better between the users 

1044
00:55:09,900 --> 00:55:12,400
and the exchange itself. 
And I think that's something. 

1045
00:55:12,600 --> 00:55:16,600
Sorely needed, especially after 
ft x so aside over. 

1046
00:55:17,000 --> 00:55:19,600
But kind of talking about like 
what's going to happen with dyd 

1047
00:55:19,600 --> 00:55:22,900
X V4. 
So obviously, it will be an 

1048
00:55:22,900 --> 00:55:27,600
independent Sovereign blockchain
and that requires layer, 1 token

1049
00:55:27,700 --> 00:55:31,100
for the chain itself. 
It's kind of undecided like, 

1050
00:55:31,100 --> 00:55:36,400
which token is actually going to
be used as the layer 1 token for

1051
00:55:36,400 --> 00:55:39,200
that chain, presumably. 
It would be the dydx token, but 

1052
00:55:39,200 --> 00:55:41,700
that's something that still 
needs to go through a 

1053
00:55:41,700 --> 00:55:44,000
governance. 
It's it's not really up to me. 

1054
00:55:44,300 --> 00:55:48,000
But yeah that layer one token 
would be used for things like 

1055
00:55:48,000 --> 00:55:52,800
staking to validators pretty 
similar to like an osmosis or 

1056
00:55:53,000 --> 00:55:55,100
some other chain, that uses 
proof of stake. 

1057
00:55:55,400 --> 00:56:02,300
It would have things like voting
on the new chain like receiving 

1058
00:56:02,300 --> 00:56:06,600
staking income potentially from 
doing staking, things like that.

1059
00:56:06,600 --> 00:56:08,100
So it's basically the same 
thing. 

1060
00:56:08,100 --> 00:56:11,800
Except with the addition of 
staking and choosing validators,

1061
00:56:11,800 --> 00:56:14,900
which I think is exciting and is
really important, too is a core 

1062
00:56:14,900 --> 00:56:17,300
use case for the utility of the 
token as well. 

1063
00:56:18,500 --> 00:56:21,900
We also wanted to talk a little 
bit like zoom out a little bit 

1064
00:56:22,300 --> 00:56:29,200
and talk a bit more about sort 
of defy and see if I heard you 

1065
00:56:29,400 --> 00:56:33,500
say in another podcast that you 
think it might take around 5 to 

1066
00:56:33,500 --> 00:56:38,900
10 years, 55 to be able to like 
really compete with C Phi what 

1067
00:56:38,900 --> 00:56:40,900
do you think are the hardest 
challenges that have to be 

1068
00:56:40,900 --> 00:56:44,600
solved for that to happen? 
Yeah, I think the biggest one is

1069
00:56:44,600 --> 00:56:48,100
probably product experience, 
still a lot of people talk about

1070
00:56:48,100 --> 00:56:50,000
it, right? 
It's just hard to build a 

1071
00:56:50,008 --> 00:56:53,400
product experience, that's on 
par with centralized products. 

1072
00:56:54,400 --> 00:56:57,100
Like just by the definition of 
the technology. 

1073
00:56:57,100 --> 00:57:00,900
Defy is always going to be 
higher latency than C Phi. 

1074
00:57:00,900 --> 00:57:03,400
I think we can get to a point 
where it's like approaching the 

1075
00:57:03,400 --> 00:57:07,100
latency you might experience on 
C Phi and things like Solana and

1076
00:57:07,100 --> 00:57:09,600
dydx. 
I've done a good job with that 

1077
00:57:09,700 --> 00:57:12,200
but it's challenging, right? 
It's just harder to build 

1078
00:57:12,200 --> 00:57:14,900
basically. 
Anything and defy it is to build

1079
00:57:14,900 --> 00:57:18,000
and see if I think the other 
thing that Five. 

1080
00:57:18,000 --> 00:57:23,700
Still really needs to solve is 
great product, use cases, and I 

1081
00:57:23,700 --> 00:57:26,800
think we've seen some of them 
and things like M&M's with, you 

1082
00:57:26,800 --> 00:57:29,800
know, Swap and others like 
lending markets with compounds. 

1083
00:57:29,800 --> 00:57:34,500
Things like n ftes, potentially 
things like, derivatives 

1084
00:57:34,500 --> 00:57:37,900
decentralized exchanges. 
But I think it takes time for a 

1085
00:57:37,900 --> 00:57:40,400
lot of these product narratives 
to play out as well. 

1086
00:57:40,400 --> 00:57:43,800
Kind of look at something like 
nft use, for example, like, and 

1087
00:57:43,800 --> 00:57:47,300
FTS existed, and like almost 
exactly the same form for, like,

1088
00:57:47,300 --> 00:57:48,300
three or four. 
For years. 

1089
00:57:48,300 --> 00:57:50,900
Like, I know the founders of 
Open Sea and they were Building 

1090
00:57:50,900 --> 00:57:53,200
open sea for like the longest 
time and like nobody used it 

1091
00:57:53,200 --> 00:57:56,400
basically, and they had no 
volume and then it sort of blew 

1092
00:57:56,400 --> 00:58:01,100
up all of a sudden like in the 
past year and with basically the

1093
00:58:01,100 --> 00:58:02,700
same product. 
And why did that happen? 

1094
00:58:02,700 --> 00:58:05,700
I think it's mostly just like, 
kind of the maturation of that 

1095
00:58:05,700 --> 00:58:08,700
product took a little while. 
And then it also takes time for 

1096
00:58:08,700 --> 00:58:11,500
users to kind of wrap their 
heads around, what is this New 

1097
00:58:11,500 --> 00:58:14,000
Concept? 
And then these things kind of go

1098
00:58:14,000 --> 00:58:16,000
viral. 
So I think it takes time for 

1099
00:58:16,000 --> 00:58:18,100
that to happen. 
Like there's mark Cycles 

1100
00:58:18,100 --> 00:58:20,900
obviously. 
And I think we see the biggest 

1101
00:58:20,900 --> 00:58:25,500
influx of new users in the bull 
markets all the time and I don't

1102
00:58:25,500 --> 00:58:26,600
have a crystal ball. 
Like, I don't know. 

1103
00:58:26,607 --> 00:58:29,700
When the next bull market is 
going to be like if ever, but 

1104
00:58:29,700 --> 00:58:31,600
it's probably it's going to be 
at least, like a year or two 

1105
00:58:31,600 --> 00:58:33,800
from now. 
So that's going to take some 

1106
00:58:33,800 --> 00:58:36,300
time. 
There's been just a lot of pain 

1107
00:58:36,300 --> 00:58:40,100
in the past year, for all crypto
companies and defy included in 

1108
00:58:40,100 --> 00:58:42,600
that with do the market 
downturn, right? 

1109
00:58:42,600 --> 00:58:46,400
And the FTX collapse, and I 
think we've been fortunate to 

1110
00:58:46,400 --> 00:58:49,500
have done a good job with like 
Our balance sheets and just our 

1111
00:58:49,500 --> 00:58:53,300
long-term focus at dydx but some
others haven't been quite so 

1112
00:58:53,300 --> 00:58:57,100
fortunate. 
There's - Regulatory headwinds 

1113
00:58:57,100 --> 00:59:01,500
and there's a ton for us to do 
on the education, side to 

1114
00:59:01,500 --> 00:59:05,700
policymakers, and Regulators to 
get them to understand, at 

1115
00:59:05,700 --> 00:59:07,400
least, first of all, like, 
what's going on. 

1116
00:59:07,400 --> 00:59:10,800
And then for them to realize 
that there are a lot of 

1117
00:59:10,800 --> 00:59:13,600
positives, even from their 
perspective, for what they're 

1118
00:59:13,600 --> 00:59:15,500
trying to accomplish that defy 
can offer. 

1119
00:59:15,600 --> 00:59:17,500
Like, I mean, everybody was 
like, talking about this on. 

1120
00:59:17,800 --> 00:59:20,000
The Twitter after FTX, right? 
It's like this is literally 

1121
00:59:20,000 --> 00:59:21,700
impossible. 
It could not have happened on a 

1122
00:59:21,707 --> 00:59:25,900
decentralized exchange so I 
think kind of making that story 

1123
00:59:25,900 --> 00:59:29,200
and getting regular people more 
or less to understand and 

1124
00:59:29,200 --> 00:59:31,700
internalize that will take time 
as well. 

1125
00:59:32,100 --> 00:59:34,800
I think there is just like one 
of the other things that I think

1126
00:59:34,800 --> 00:59:37,800
is really positive is there's 
just a continuous influx of 

1127
00:59:37,800 --> 00:59:41,800
talent in to defy in crypto. 
And I think that takes a lot of 

1128
00:59:41,800 --> 00:59:45,700
time as well. 
And yeah, and I think just all 

1129
00:59:45,700 --> 00:59:49,200
these things put together, like 
finding That market fits like 

1130
00:59:49,200 --> 00:59:52,800
regulatory education, like more 
talents, the users understand 

1131
00:59:52,800 --> 00:59:56,000
more, this takes time, and it 
takes longer than people think. 

1132
00:59:56,500 --> 01:00:00,200
Like the do you think the like, 
looking back, in a few years, 

1133
01:00:00,200 --> 01:00:06,000
the FDX collects will kind of 
have helped to defy ecosystem or

1134
01:00:06,100 --> 01:00:08,200
like how do you, how do you see 
it right now? 

1135
01:00:08,900 --> 01:00:12,200
So what I told our team is I 
think it will certainly help 

1136
01:00:12,200 --> 01:00:15,300
defy in the long term. 
Again like the five to 10 year 

1137
01:00:15,300 --> 01:00:17,100
future that we were talking 
about. 

1138
01:00:17,100 --> 01:00:21,900
But I think maybe it helps defy 
like a little bit like right now

1139
01:00:21,900 --> 01:00:25,900
relative to see if I but I think
the damage it did to the overall

1140
01:00:25,900 --> 01:00:30,100
space is so negative that 
probably you know plus and minus

1141
01:00:30,100 --> 01:00:35,000
45 companies it's negative and 
the next year or two just with 

1142
01:00:35,000 --> 01:00:37,800
things like obviously the price 
is got hammered to the 

1143
01:00:38,000 --> 01:00:40,800
confidence that Traders and 
investors have in the space was 

1144
01:00:40,800 --> 01:00:44,400
super shaken though like - 
regulatory had ones that I 

1145
01:00:44,408 --> 01:00:46,600
talked about. 
So I do think it's going to be 

1146
01:00:46,600 --> 01:00:49,600
negative for the A year or two 
and have to like prepare 

1147
01:00:49,600 --> 01:00:53,600
ourselves for that, but I even 
felt this personally to and end 

1148
01:00:53,600 --> 01:00:56,500
of the day, the FTX collapse 
happened, which, for me at least

1149
01:00:56,500 --> 01:00:59,700
was the most surprising day that
I've had in crypto so far. 

1150
01:01:00,600 --> 01:01:04,200
It really gave me a ton of 
resolve and confidence that what

1151
01:01:04,200 --> 01:01:07,000
we're building has to exist at 
some point. 

1152
01:01:07,000 --> 01:01:09,800
Like, I don't know, maybe I'm 
crazy, but like, once you kind 

1153
01:01:09,800 --> 01:01:12,600
of wrap your heads around, like 
what a decentralized exchange 

1154
01:01:12,600 --> 01:01:16,100
is, or even what it is, but 
like, what it could be, you're 

1155
01:01:16,100 --> 01:01:20,300
like, this is like better. 
I like uses just has to exist, 

1156
01:01:20,400 --> 01:01:22,200
like it's some form in the 
future. 

1157
01:01:22,200 --> 01:01:24,700
Long-term it solves a lot of 
these problems. 

1158
01:01:24,900 --> 01:01:30,000
It creates this open like equal 
the accessible Financial system 

1159
01:01:30,000 --> 01:01:32,500
for the world. 
And you talked about you like 

1160
01:01:32,500 --> 01:01:34,700
look at like a lot of the 
mission statements for some of 

1161
01:01:34,700 --> 01:01:36,500
these companies. 
Like, if you look at the mission

1162
01:01:36,500 --> 01:01:38,800
statement for like a Robin Hood,
for example, it's like they want

1163
01:01:38,800 --> 01:01:44,000
to democratize access to like 
Finance or whatever and coin 

1164
01:01:44,000 --> 01:01:46,400
basis at least for the longest 
time was they want to build an 

1165
01:01:46,400 --> 01:01:48,400
open Financial system. 
Or the world. 

1166
01:01:48,700 --> 01:01:50,400
It's like, how are you going to 
do that? 

1167
01:01:50,500 --> 01:01:53,200
Like it just look at like the 
technology that you have 

1168
01:01:53,200 --> 01:01:55,800
available to you. 
It's like, yes, that's that's 

1169
01:01:55,800 --> 01:01:58,200
exactly what we should be doing.
But this is the technology that 

1170
01:01:58,200 --> 01:02:01,600
we should be building on to be 
able to make that future 

1171
01:02:01,600 --> 01:02:03,700
possible. 
And again, I think it'll take 

1172
01:02:03,700 --> 01:02:06,500
longer than people think and 
people will be disillusioned, 

1173
01:02:06,500 --> 01:02:07,700
right? 
And I think people have been 

1174
01:02:07,700 --> 01:02:10,900
disillusions especially with 
defy and the past year or two 

1175
01:02:11,300 --> 01:02:13,900
because in this happens, with 
all these technologies always 

1176
01:02:13,900 --> 01:02:16,100
the same thing. 
It's always like people are 

1177
01:02:16,100 --> 01:02:18,700
right, basically, when you start
It's like we have the right 

1178
01:02:18,700 --> 01:02:20,000
idea. 
We don't know exactly what it's 

1179
01:02:20,000 --> 01:02:22,500
going to be, but it's like okay,
yeah, we kind of get it at least

1180
01:02:22,500 --> 01:02:25,100
for the people that understand 
that we can build these open 

1181
01:02:25,300 --> 01:02:27,700
Financial platforms and that's 
fundamentally new thing. 

1182
01:02:27,700 --> 01:02:29,700
Like this is amazing like 
everybody should use this but 

1183
01:02:29,700 --> 01:02:33,100
then it's like wait. 
Like this sucks at least for the

1184
01:02:33,100 --> 01:02:35,700
first couple of years. 
Like this is like he told me 

1185
01:02:35,700 --> 01:02:38,200
this is going to be a new 
Financial system and I can like 

1186
01:02:38,300 --> 01:02:41,500
barely even connect my metamath 
qualit to like this website. 

1187
01:02:41,500 --> 01:02:42,700
Like what the hell is going on 
here? 

1188
01:02:43,100 --> 01:02:46,100
But then, you know, after years 
of building and that causes 

1189
01:02:46,100 --> 01:02:50,100
disillusionment and Crypto. 
This is even more negatively 

1190
01:02:50,100 --> 01:02:52,600
reflexive, right? 
Because there's prices that are 

1191
01:02:52,600 --> 01:02:55,400
attached to all of these things 
and the prices are going down. 

1192
01:02:55,400 --> 01:02:57,900
And everybody's like oh this is 
like an even bigger piece of 

1193
01:02:58,100 --> 01:03:02,100
shit and it's like it just 
causes these things to get 

1194
01:03:02,100 --> 01:03:03,700
higher and get lower than they 
probably. 

1195
01:03:03,700 --> 01:03:06,100
Otherwise would if everything 
weren't Christ, but I think it 

1196
01:03:06,100 --> 01:03:10,100
takes while and there a hype 
Cycles but at least to me like 

1197
01:03:10,100 --> 01:03:13,400
the FTX collapse really gave me 
a lot of confidence that this 

1198
01:03:13,400 --> 01:03:16,200
has to exist a long term and 
something. 

1199
01:03:16,200 --> 01:03:19,100
I'm excited to be at Forefront 
of helping to build. 

1200
01:03:20,000 --> 01:03:21,100
Also the other three. 
Cool. 

1201
01:03:21,100 --> 01:03:24,500
At we do have a like a question 
actually in the Stream that is 

1202
01:03:24,700 --> 01:03:27,800
somewhat related, I guess to 
this whole discussion. 

1203
01:03:27,800 --> 01:03:30,100
So I think we kind of mentioned.
Yeah, you're building. 

1204
01:03:30,100 --> 01:03:34,100
Obviously the product on this 
decentralized platform to enable

1205
01:03:34,100 --> 01:03:38,500
this future right that defy 
tries to promise. 

1206
01:03:38,800 --> 01:03:40,500
Now is there also like something
you're doing. 

1207
01:03:40,500 --> 01:03:43,300
I think you mentioned it briefly
like kind of educating The 

1208
01:03:43,300 --> 01:03:46,200
Regulators or like interacting 
with regulations. 

1209
01:03:46,200 --> 01:03:47,500
Something to you, idx 
Foundation. 

1210
01:03:47,600 --> 01:03:50,400
One or someone is doing, or are 
you like more focused on the 

1211
01:03:51,100 --> 01:03:54,000
product side and if you're 
doing, like, what can you expand

1212
01:03:54,000 --> 01:03:57,600
a bit on explain, maybe what 
you're, how you're approaching 

1213
01:03:57,600 --> 01:03:59,500
that? 
Yeah. 

1214
01:03:59,500 --> 01:04:02,100
Absolutely. 
So just to be clear, like The 

1215
01:04:02,100 --> 01:04:06,100
Balch like almost entirely the 
company and the project more 

1216
01:04:06,100 --> 01:04:10,300
broadly is focused on product. 
And just building dyd X V4. 

1217
01:04:10,600 --> 01:04:13,700
It's important not to get too 
distracted by like any of these 

1218
01:04:13,700 --> 01:04:15,800
things. 
And part sack in particular. 

1219
01:04:15,900 --> 01:04:18,300
I think you kind of saw that 
happen in a pretty negative way 

1220
01:04:18,300 --> 01:04:22,500
with FTX like one of the biggest
things like SBF was doing for 

1221
01:04:22,500 --> 01:04:25,500
the year, prior to the collapse 
is like talking to regulators 

1222
01:04:25,500 --> 01:04:28,300
and stuff and that wasn't 
necessarily bad at least from 

1223
01:04:28,300 --> 01:04:29,700
there. 
Perspective. 

1224
01:04:30,300 --> 01:04:33,200
But I think you saw some of the 
product progress on FTX 

1225
01:04:33,200 --> 01:04:36,000
stagnates for a while because of
that. 

1226
01:04:36,000 --> 01:04:38,300
So we're really focused on the 
product itself. 

1227
01:04:38,600 --> 01:04:41,400
That being said, as I mentioned 
before, I do think this is a 

1228
01:04:41,408 --> 01:04:45,500
really important thing that 
needs to be done going forwards.

1229
01:04:45,500 --> 01:04:49,500
It's just critical that 
developers can build open source

1230
01:04:49,500 --> 01:04:53,200
software in a legal way. 
Going forward, I think there's 

1231
01:04:53,200 --> 01:04:56,200
sort of this meme at least on 
crypto Twitter that I see a lot 

1232
01:04:56,500 --> 01:04:58,800
that's like, oh, just like 
everybody should be. 

1233
01:04:58,900 --> 01:05:02,000
Be anonymous and like, well, 
I'll be fine and like, you know,

1234
01:05:02,200 --> 01:05:05,000
who cares about the law. 
I like, we're all just like move

1235
01:05:05,000 --> 01:05:06,700
to someplace. 
They can never catch us or 

1236
01:05:06,707 --> 01:05:10,300
whatever and like maybe some 
people will do that and like 

1237
01:05:10,300 --> 01:05:12,200
some people have done that 
empirically. 

1238
01:05:12,300 --> 01:05:15,300
I think it probably won't work 
for the bulk of people once like

1239
01:05:15,300 --> 01:05:18,600
Regulators actually start caring
about this stuff but like, even 

1240
01:05:18,600 --> 01:05:22,100
if it works for a very few 
amount of developers, like the 

1241
01:05:22,100 --> 01:05:25,100
thing I said that we need before
is like more talents into 

1242
01:05:25,100 --> 01:05:27,500
crypto, right? 
And it's like, how are you going

1243
01:05:27,500 --> 01:05:30,000
to get like enough developer? 
Islands in the crypto. 

1244
01:05:30,200 --> 01:05:32,800
If like the answer is like, oh 
yeah, everybody's just like 

1245
01:05:32,800 --> 01:05:37,200
Anonymous and like as perfect 
opsec and moves to, like Malta 

1246
01:05:37,200 --> 01:05:38,900
or whatever, like, it's not 
gonna happen. 

1247
01:05:38,900 --> 01:05:42,200
Like, we're not going to build 
like this future that we want 

1248
01:05:42,200 --> 01:05:44,800
all want to exist and that we 
feel like as better Financial 

1249
01:05:44,800 --> 01:05:47,100
system from a world and less 
developers can build these 

1250
01:05:47,100 --> 01:05:49,900
things in a legal way. 
So that's kind of just 

1251
01:05:49,900 --> 01:05:52,400
motivating the problem. 
Like, I feel like it's 

1252
01:05:52,400 --> 01:05:54,500
important. 
It's like, from my perspective, 

1253
01:05:54,500 --> 01:05:57,700
like, literally impossible for 
us to build this future without 

1254
01:05:57,700 --> 01:05:59,700
doing this. 
So, It's important. 

1255
01:05:59,700 --> 01:06:02,700
And we are starting to do this 
at dydx. 

1256
01:06:03,100 --> 01:06:06,100
We're certainly not like the 
biggest player, like the biggest

1257
01:06:06,100 --> 01:06:08,300
voice for defy. 
There's a lot of other great 

1258
01:06:08,300 --> 01:06:11,000
people like the blockchain 
association like the defy, 

1259
01:06:11,000 --> 01:06:14,200
education funds, other projects.
Like, I know, you know, swap is 

1260
01:06:14,200 --> 01:06:18,400
doing a good job in this, in 
terms of regulatory Outreach, I 

1261
01:06:18,400 --> 01:06:20,800
think it's hard, right? 
Because there's tons of 

1262
01:06:20,800 --> 01:06:24,300
different regulators and tons of
different jurisdictions for us. 

1263
01:06:24,300 --> 01:06:28,000
Our team is based in the u.s. so
it's primarily like u.s. 

1264
01:06:28,000 --> 01:06:32,100
regulation Focused. 
So, like we do go out and talk 

1265
01:06:32,100 --> 01:06:34,700
to Regulators, but the thing 
we've really started trying to 

1266
01:06:34,700 --> 01:06:37,800
do more of is going out and 
talking to policymakers. 

1267
01:06:37,800 --> 01:06:41,400
We just like, basically, like 
senators or like their staff for

1268
01:06:41,400 --> 01:06:46,000
like people that are actually in
government because the kind of 

1269
01:06:46,000 --> 01:06:48,500
realization that we've come to. 
And a lot of people have come to

1270
01:06:48,500 --> 01:06:50,300
over time. 
Is that a lot of the laws that 

1271
01:06:50,300 --> 01:06:53,200
exist right now just like 
literally don't make sense for 

1272
01:06:53,200 --> 01:06:56,300
crypto, right? 
It's like let's maybe just take 

1273
01:06:56,300 --> 01:06:57,400
an example, like an obvious 
example. 

1274
01:06:57,400 --> 01:07:01,800
Like a lot of the Relatives 
regulation and the u.s. is based

1275
01:07:01,800 --> 01:07:04,300
around transparency, which makes
a lot of sense, right? 

1276
01:07:04,300 --> 01:07:07,500
Like you want to make sure as 
per like FTX that when you're 

1277
01:07:07,500 --> 01:07:10,100
trading on a derivatives 
exchange, you know, where the 

1278
01:07:10,100 --> 01:07:12,300
customer funds are right. 
Let's like pretty basic. 

1279
01:07:12,300 --> 01:07:13,900
Like we can all agree that, that
should be the case. 

1280
01:07:14,200 --> 01:07:17,100
So a lot of the regulation 
focuses around that and there's 

1281
01:07:17,100 --> 01:07:19,600
like, all these requirements and
you got to have like people and 

1282
01:07:19,600 --> 01:07:21,500
submit audit reports and all the
stuff like whatever. 

1283
01:07:21,900 --> 01:07:24,900
But in defy, like it solves it's
like shall look. 

1284
01:07:24,900 --> 01:07:27,900
On users can it's like a hundred
times better than like any 

1285
01:07:27,900 --> 01:07:32,100
auditing or Licensing we could 
ever do so like why the heck 

1286
01:07:32,200 --> 01:07:35,000
like do you have to submit like 
an audit report for where the 

1287
01:07:35,000 --> 01:07:37,200
customer funds are with defy 
like disco? 

1288
01:07:37,200 --> 01:07:40,200
Look at it like ether scan right
now, like it doesn't make sense 

1289
01:07:40,500 --> 01:07:42,500
and there's like, even worse 
than that, like, a lot. 

1290
01:07:42,500 --> 01:07:45,100
There's like, just not a lot of 
what, there's not any ways to 

1291
01:07:45,100 --> 01:07:49,400
comply with, like, certain 
regulations for a spark contract

1292
01:07:49,400 --> 01:07:51,500
because the regulations just 
weren't drawn up with that in 

1293
01:07:51,500 --> 01:07:54,000
mind. 
So like, you know, realization 

1294
01:07:54,000 --> 01:07:57,200
to like, we feel like it's 
obvious that there needs to be 

1295
01:07:57,600 --> 01:08:00,700
new policy. 
See not just like new regulation

1296
01:08:00,700 --> 01:08:03,800
for some of these things 
long-term and policy also is 

1297
01:08:03,800 --> 01:08:06,800
just like much more open-ended, 
right? 

1298
01:08:07,000 --> 01:08:09,700
I think regulation a lot of 
times comes down to what 

1299
01:08:09,700 --> 01:08:12,300
literally are the laws. 
It's not really so much 

1300
01:08:12,300 --> 01:08:15,800
Regulators jobs to like change 
the laws right where their jobs 

1301
01:08:15,800 --> 01:08:18,100
to interpret the laws and 
enforce the laws. 

1302
01:08:18,399 --> 01:08:20,600
But if you're sitting here 
saying well like some of these 

1303
01:08:20,600 --> 01:08:23,600
laws just like don't really make
sense, then you have to go to 

1304
01:08:23,600 --> 01:08:26,200
the root of the problem which is
policy. 

1305
01:08:26,200 --> 01:08:30,399
And I think policy, Takes a 
really long time, right? 

1306
01:08:30,399 --> 01:08:32,399
But we still feel like it's 
worth doing it because of the 

1307
01:08:32,399 --> 01:08:36,800
time Horizon that we're building
for, and, you know, we want to 

1308
01:08:36,800 --> 01:08:40,100
ensure that developers can 
continue to build a lot of these

1309
01:08:40,100 --> 01:08:43,500
things in a legal way. 
Like specifically, I've done 

1310
01:08:43,500 --> 01:08:46,500
some meetings with, like staffs 
of various Senators, things like

1311
01:08:46,500 --> 01:08:48,700
that. 
We have just recently hired a 

1312
01:08:48,700 --> 01:08:51,300
really great head of policy that
we're excited about. 

1313
01:08:51,800 --> 01:08:55,000
And I think it's great that 
there are so many third parties 

1314
01:08:55,000 --> 01:08:58,100
that are out there that are kind
of making the case for defy to 

1315
01:08:58,100 --> 01:08:59,000
policymakers. 
Hers. 

1316
01:08:59,000 --> 01:09:01,000
And that's absolutely important 
and should consider. 

1317
01:09:01,200 --> 01:09:03,600
But I think one of the things 
that hasn't happened so much, 

1318
01:09:03,700 --> 01:09:06,500
but I think is really important.
Going forwards is literally the 

1319
01:09:06,500 --> 01:09:09,200
people that are building defy to
go and make a name for 

1320
01:09:09,200 --> 01:09:12,000
themselves and like, go and be 
the ones that are out there like

1321
01:09:12,000 --> 01:09:16,600
educating people on what what is
D Phi, like, what how could it 

1322
01:09:16,600 --> 01:09:19,600
possibly have solved the like, 
FTX collapse? 

1323
01:09:19,899 --> 01:09:21,500
What are the risks? 
Like, how should it be 

1324
01:09:21,500 --> 01:09:24,300
regulated? 
And I think just like starting 

1325
01:09:24,300 --> 01:09:27,300
that conversation is really 
important and something that we 

1326
01:09:27,300 --> 01:09:30,000
have really just started 
thinking about it, you ydx, but 

1327
01:09:30,000 --> 01:09:32,000
I think will become more 
important over time. 

1328
01:09:32,899 --> 01:09:35,200
Well, amazing. 
Well, final question. 

1329
01:09:35,200 --> 01:09:38,100
And it may be a little bit like 
different topics. 

1330
01:09:38,100 --> 01:09:44,100
So aside from dydx and crypto, 
what do you most interesting in 

1331
01:09:44,100 --> 01:09:47,000
at the moment? 
Yeah. 

1332
01:09:47,100 --> 01:09:50,399
He'll I mean maybe in crypto I 
don't know I just been working 

1333
01:09:50,399 --> 01:09:52,700
crypto my whole career so I can 
barely even think about anything

1334
01:09:52,700 --> 01:09:56,100
else or don't know, that much at
least but I'm excited about NF. 

1335
01:09:56,100 --> 01:10:00,300
T is like I think nft is our 
something that's newer, right? 

1336
01:10:01,100 --> 01:10:04,500
And I think they probably will 
experience this like trough of 

1337
01:10:04,500 --> 01:10:07,100
disillusionment every new 
technology goes through. 

1338
01:10:07,500 --> 01:10:10,400
But yeah, excited about things 
like open sea and Magic. 

1339
01:10:10,400 --> 01:10:14,500
Eden excited for a lot of the 
infra work to continue on. 

1340
01:10:14,500 --> 01:10:17,300
Krypto So we talked about some 
of it right? 

1341
01:10:17,300 --> 01:10:22,200
Just like the l2's continuing to
improve different L wands. 

1342
01:10:22,500 --> 01:10:27,100
And yeah, I mean, obviously, I'm
excited about defy, I don't have

1343
01:10:27,100 --> 01:10:29,700
any like, superhot takes for you
because I feel like one of the 

1344
01:10:29,700 --> 01:10:32,800
things in crypto is people just 
get excited about like random 

1345
01:10:32,800 --> 01:10:34,200
stuff that doesn't make sense 
to. 

1346
01:10:34,500 --> 01:10:36,900
And I think there was only like 
three or four narratives that 

1347
01:10:36,900 --> 01:10:40,900
actually do make sense to me, at
least in crypto, which is like d

1348
01:10:40,900 --> 01:10:45,100
Phi n ftes like infrastructure 
and like data basically. 

1349
01:10:45,200 --> 01:10:46,600
I like I don't find anything 
else. 

1350
01:10:46,600 --> 01:10:48,900
Super interesting, that that's 
not to say like nobody should 

1351
01:10:48,900 --> 01:10:52,100
build anything besides that, 
like I would not have included 

1352
01:10:52,100 --> 01:10:54,500
nft use and that if you'd asked 
me a year ago and I would have 

1353
01:10:54,500 --> 01:10:57,400
been wrong but at least for the 
things that are proven those are

1354
01:10:57,400 --> 01:11:00,100
probably the most interesting to
me and I think we have a long 

1355
01:11:00,100 --> 01:11:02,900
way to go on them. 
Paul amazing. 

1356
01:11:02,900 --> 01:11:05,700
Well, thanks so much Antonio for
joining us really appreciated 

1357
01:11:05,700 --> 01:11:10,000
how like 16th to the point. 
Like, you know, you kind of ask 

1358
01:11:10,000 --> 01:11:13,800
the questions and like, went 
through kind of dydx is history 

1359
01:11:14,400 --> 01:11:18,000
and what you guys doing, super 
exciting exciting. 

1360
01:11:18,000 --> 01:11:22,400
And, you know, I'm really 
excited to see before. 

1361
01:11:22,400 --> 01:11:26,800
What are you guys going to do in
terms of billing that chain and 

1362
01:11:26,800 --> 01:11:30,700
also in terms of just you know, 
pushing forward? 

1363
01:11:31,300 --> 01:11:35,500
The I've chained teases the 
cosmos SDK, you know, tenement 

1364
01:11:35,500 --> 01:11:37,600
like so many different things 
that I think are going to be 

1365
01:11:37,608 --> 01:11:41,200
like, super excited. 
So yeah, excited to see what you

1366
01:11:41,208 --> 01:11:43,300
guys are going to build and how 
it's going to develop. 

1367
01:11:43,300 --> 01:11:46,500
And hopefully we can, you know, 
resume that conversation at some

1368
01:11:46,500 --> 01:11:48,900
point in the future. 
Maybe when there's like 35 or 

1369
01:11:48,900 --> 01:11:51,900
something like that, coming up 
sounds good. 

1370
01:11:51,900 --> 01:11:56,000
Well, thanks so much for having 
me on and great conversation and

1371
01:11:56,000 --> 01:11:58,600
thanks so much for listening to 
tuning in and we look forward to

1372
01:11:58,600 --> 01:12:03,200
being back next week. 
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1373
01:12:03,200 --> 01:12:05,600
week's episode. 
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1374
01:12:05,600 --> 01:12:07,600
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1375
01:12:07,600 --> 01:12:11,300
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01:12:11,300 --> 01:12:13,700
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01:12:13,700 --> 01:12:16,500
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01:12:16,508 --> 01:12:20,300
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01:12:20,300 --> 01:12:23,100
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01:12:23,100 --> 01:12:25,400
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01:12:25,400 --> 01:12:28,700
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01:12:28,708 --> 01:12:31,700
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01:12:31,700 --> 01:12:34,300
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01:12:34,600 --> 01:12:37,000
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01:12:37,100 --> 01:12:40,400
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