The weapon, the epicenter the podcast for every interview
prep. The founders Bill.
Listen fault leaders about the future of crypto.
So I'm Brian Crane, and I'm here with my hair, my hair.
Who's doing a comeback right from from his break from cancer,
so, So amazing to have you back. Thank you.
And we're going to speak with goon.
I mean guns are about Avalanche. She's actually been on this
podcast 3 times 4 and maybe we can start off by briefly
mentioning the old episodes we did.
Because it was like, interesting sort of through the Journey of
crypto. But before we get started, just
very briefly about two sponsors. So first of all, I prefer steak
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And now with that, let's go to our episode spoon.
It's so great to have you. Thanks so much for coming back.
It's so great to be here. It's so great to see you both,
and they have so wonderful to be talking to you again.
Is this fantastic? Thank you, hon.
I was I was looking through, like, preparing for this is
looking through the old episodes we did.
And it's pretty interesting. So we did one in 2015 which was
around selfish mining together with etai.
So that was kind of one of the papers looking at, you know,
some maybe game-theoretic weaknesses or I'm proof of work
and Bitcoin and then we did another episode The same year,
which was about again you he tell you which is why I was
about Bitcoin in G and B Ko NG was basically this idea for how
to scale, you know, transaction to put on big coin, like by a
lot while basically keeping the consensus algorithm like
fundamentally unchanged. So I remember that.
And I was like, this is so elegant and really cool and like
by like should like Implement on bitcoin and and so maybe the
doing this episode if you dare and of course, that was a long.
What about this? This whole block size debate
and, you know, there was people like my current and guaranteed
reason and you like trying to get, like new ideas into
Bitcoin. So, you know, you are very
involved back then, and I think this were like, super
interesting discussions and then you had another episode of you,
which was the year after 2016 with Flats a together and it
was, right. So, and this thing had launched
on a theorem called the Dow, and it has accumulated as a.
I 10% of all the Aether in there.
You guys wrote this blog post about like all your all the like
design flaws and weaknesses of this vein and actually met had
also been like writing online about like, oh this is other
thing that's also flawed and I was like reading through this as
a daily deal with this episode and then of course, right after
it's the biggest hack that happened in any theorems
history. Certainly in terms of the
percentage of the number of ether involved and that lent
then display. Of everything with plastic and
and what was also interesting at a later point, you know the SEC
wrote this paper about the Dow being a security which was the
first kind of the first time they see really made a statement
about how they view tokens and total sales.
So that was like the year after and one of the one of the
evidence that they quoted in this thing that this was a
security was what the way Flats a had described.
The curators in our episode. So, it's very cool that we had
like a podcast cited there. So, yeah, such great episodes.
We have q and, like, great discussions and then they spin
it for too long Gap. Given all the things I have is
no things that you've done, because it's been like, yeah,
you've done a huge amount following that, as well.
It's been a great ride. It's been a great ride.
We live through you. I don't know how many market
returns and downturns together, and but I Were the very first
episode when together it was by far the most informed by far the
most challenging conversation. I had at that point and it was
fantastic. I was like, whoa, look at this.
These guys are asking all the right questions.
It was such a blast. But yeah, it's been five years.
I think since the last episode or something, right?
This is five years since 2016 and there has been much that
that's happened layer to save calm and some gone ain't nothing
ever goes away. Slayer to stuff come and kind of
floundered. New layer ones are here.
There's another batch of competing competing projects,
lots and lots of excitement. The entire space has grown
tremendously is poised to grow even more.
And, you know, back when we last talked.
It was just people like us. It was just just geeky geeky
people. And, and now it's just, I talked
to a fund managers. I talked to and down and people
are in charge of and them once and so forth.
So it's a very different, you know, System out there and the
DAP system is thriving. I mean, we've come such a long
way. It's so fascinating.
And it's so great to come back to good, old friends and and
and, you know, chat about where we are today.
Indeed, indeed intervening five years.
Of course, the big story is has been Avalanche, right?
So I mean, the initial idea and white paper was from a team
called letting the rocket Labs, which the team remains Anonymous
to this day as far as I'm I'm aware and then a month or two
after that white paper came out. Came the announcement that
you'll be building it. And now we've built it, a new
shift it right following from Twitter.
I also saw that at some point while starting to build
Avalanche, you decided to take a sabbatical from Cornell where
you were full professor. And when I saw that tweet, I was
like, whoa, that must have been a big decision.
What was it like for you too? Take a break from being a
professional like, you know, being a full Professor there and
embarking on a journey like this.
It was it was very straightforward.
Actually. Mary was very, very simple for
me because you know, as a professor you're constantly
coming. I was like that's a research
University or coming up with new ideas.
You're coming up with with new ways of approaching problems.
And you are working with some of the best and brightest people on
the planet. So, so we do this and You don't
necessarily pay attention to product Market fit, right?
So, as a professor, you're there for the academics, you're there
for the science. So you're trying to figure out
ways of advancing us. So, I worked on a bunch of other
topics in the intervening five years.
So I worked on characterizing these centralization.
I worked on characterizing scalability.
I worked on a layer 2 protocol teach antichain.
That's really, really fast. I think it's the fastest layer 2
protocol and At some point you work on something.
That is so big that as soon as you do it you go.
Okay. This is this is in this is
important and and so my whole life I had been in an educator,
I'd studied this stuff. I never thought consensus,
protocols could be fast. I never thought, Byzantine fault
tolerance could be cheap and and as soon as you know, we started
dealing with the Avalanche protocol, we notice that hey,
this is going to be big. It's So different from
everything that came before us and so different.
Even other academics don't understand just how important it
is and in they can't even fit into their Frameworks because
it's just so much so much better across so many direct
Dimensions. So as soon as I had that in my
hands, it was a very straightforward decision.
I decided to take a break from Cornell and I ended up taking
one year of leave of absence form.
The company started building it up shortly thereafter.
We Got some funding from Andreessen Horowitz and from
some crypto funds including poly chain know Vol and others
initialized, you know, Alexis Ohanian Etc.
And so that was a great start and and then of course, after
that the rest is history. We launched about a year ago.
I think it's been 14 months. So we're only 13 or 14 months
old. It hasn't been that long at all.
We're up there with the big boys.
We're up there with systems that are far older than us.
And And it's been wonderful. And there, I can tell you
something else that you maybe don't know.
And this might be one of the, one of the places that that this
comes out, but back, in September, this September, so,
three years after I took. Oh I should have mentioned.
I took a year of leave of absence.
I extended it for another year for two years.
Then I requested permission for a third year and Cornell doesn't
allow typically like it never happens that they give you the
third year. They were nice enough.
Enough to give me the third year.
And then at the end of the third year, last September, it was
time to make a decision. Go back to Cornell or, or stay
at Avalanche. Stay at Ava labs and work on
Avalanche and and I made the decision and the decision was
to, to be at Ava labs to not go back to Cornell.
So I've stepped down from my position at Cornell and gave up
my tenure and I'm full-time on Avalanche because I think that's
clearly where the the future is that Clearly were the most
happening places when it comes to research and development on
blockchains. Let's talk about, I'd be like,
what makes Avalanche so unique and are there like, is it just
in your opinion? Is it just unequivocally better
than like everything else or like what are the trade-offs
that I want, has a consensus? Right.
So, the issue of trade-offs is very important, right?
And people always think, like, this is like, judeo Christian
values. Like, you can't have anything
for free. You have to give something up to
get something, right? And, you know, that's typically
true, as long as you stay within the same family of Technologies.
So if the goal is to move a lot of Earth and you've got a small
shovel with a short handle and I invent a big shovel with a
longer handle, you know, There's a trade-off there.
We're using the same technology. But as you make the shovel
bigger than it carries more weight, you need more strength
as you make the handle bigger than you.
Have to have even more strength, Etc.
So that's fine. And then Along Comes somebody
with a steam shovel. That's a different technology
and it has it completely changes the game.
It changes the game brings on the Industrial Revolution and
you go from like being a pleb with a little shovel in his hand
to someone who can who can really We excavate the Earth.
So, in the case of avalanche are there are there are trade-offs.
Obviously, there's always some trade-off, but across everything
that people have ever, said, matters to them.
Avalanche is a huge step up. It is the third biggest
breakthrough in the space of distributed systems.
It is only the third time that somebody invented, a new family
of consensus, protocols, the first family classical
consensus, it brought some tutoring Awards to the people
who I wish that field and all the hundreds of protocols that
followed all descend from that work.
So and everything that you hear that proof of stake today, that
isn't Avalanche is using a classical protocol.
Typically from 1999 sometimes from 1980s.
And so protocols, like polka dots, Saldana, Etc.
These are all using classical consensus in which all of the
validators collect information from all of the other
validators. There is there is all to all
Then there's M squared communication.
So the second big breakthrough was proof-of-work mining.
So Bitcoin and Satoshi came along.
And they did an amazing job. They changed the consensus
protocol and I said, hey guys, there was a better way to do
this. It's scales much better.
It's far more robust, except of course.
The problem is it consumes a lot of lot of lot of power.
A lot of electricity. An avalanche is the third
biggest breakthrough. It's it's efficient like
classical protocols. It doesn't have any mining in
it. It doesn't consume energy.
It doesn't leak money out of the ecosystem to the miners and to
the power companies and and at the same time it's fast.
The latency is are incredibly low.
We're getting confirmation, latency is of 750 Ms. These
days. These are insanely fast speeds.
Nobody ever comes close. So so that's part of The magic
that makes it really, really fast and what are the
trade-offs? I think there's always some
trade-off maybe, but because you're going from some crappy
technology to a much better technology, you can be better
than what came before you on every metric.
That matters. The when people ask me, what the
biggest downside is of avalanche.
I do need to be as a scientist. We need to be upfront with are
our weaknesses. The biggest weakness is that
it's a new product. All it's not as well established
as say Bitcoin is it's not as well as stablished as classical.
Protocols are so you know, let's say the salon the protocol
behind Solana. It's incredibly well understood.
So you should be able to write that stuff and get it.
Correct. You should be able to operate
that Network without downtime forever.
After it's not very hard. You can get a master student to
write that code. It's doable but Avalanche
requires a little bit of, you know, a little bit more complex.
The and, and a little bit more nuanced, and no one has ever
done anything, like it before. So, there are risks associated
with new protocols. I would say that that's the
first one. And is it better than other
protocols across all Dimensions, know if you have a highly
centralized network. If you have a network consisting
of, let's say up to ten, nodes may be up to 20 nodes.
Then all to all communication, might be better than Avalanche
Style. Ation, so 10 squared is not a
very high number. So if you got 10 validators,
then you probably should use like you can use an old-school
protocol like tender Mentor Solana or whatever.
So if all the decisions are being made by a small set of
nodes, then you don't want the the the Avalanche complexity.
And in fact, Avalanche might be slower because of the way it
operates. It might be just better to have
a multi round a fixed number of rounds.
Three rounds. Overall total communication,
which is what pbft would do in such a scenario.
So, so on the very low end Avalanche might be not suitable
for you, but the magic of avalanches, as you add more
validators, as you build truly decentralized systems, then it
outshines the competition by a mile and a half.
So it scales differently. And if you have thousands of
validators, it's so much better than than the alternative than
the classical protocols. So, often times I hear that one
of the one of the downsides of avalanche is that bridging to
Avalanche is hard and eventually everything like the way to
bridge two, Avalanche is to build trust and bridges and
actually the bridge between it helium.
And Avalanche is actually a multiset bridge which has been
secured by SG X, which is essentially a set of signers
running. A burning a bridge.
Do you think there is any grounds too?
Maybe that Avalanche consensus makes bridging hard into the
ecosystem. Other change.
That's an interesting question. So, okay, so there is a lot to
unpack there. So let me try to unpack it.
I think some of the first part of what you said derives from
our first Bridge. So for the longest time, we were
using a conventional bridge that is residing on the theorem an
avalanche and the etherium side was executing on chain.
So it was a regular Change the regular bridge from chain safe.
And in fact, it's a chain. It's a bridge that's used by
quite a few other protocols besides us.
We found that it was quite fragile.
And at times there were some issues with it that that we were
aware of that could have cost, you know, a lot of a lot of
coins to other people who are using the same Bridge.
So it's at some point we decided, hey, we need to ditch
this thing. And we need to go to a much
better foundation. So we built an entirely
different kind of Of bridge based on a very different kind
of technology for secure execution.
As you mentioned is called sgx. It ensures that the bridge,
operator cannot modify the code of the bridge.
The bridge operator cannot gain access to information that's
stored inside the bridge, in particular, the bridge operator
cannot access via the all too important secret, which controls
all the funds that are in the bridge.
So the bridge can only do one function.
It's got a hash. If it's code, and as long as
that hash remains unchanged, the bridge can do only one function,
which is take your funds on the theorem and give them to you on
Avalanche and vice versa. The purging job.
So that's a first of its kind of bridge ever since we installed
it ever since we made it public. We've got nothing but huge.
Praise. I believe it is the smoothest
bridging experience out there. It's fast.
It's super cheap because nothing almost Happens on the etherium
side. You just have to send your funds
to the bridge address. So it's just a single
transaction. It's a very simple, simple
transaction, very very gas. Efficient very, very low cost.
So so our Bridge has been getting praise from everybody.
There is also a meme going around, good bridging.
So GMG be every morning. There is a point that somebody
issued to all the bridge users called GB, and it's fantastic to
have that as well. So the bridge has really been
good and one. Consent misconception.
I want to correct. Is it's true that the the key
Secret inside the bridge is divided split and distributor to
four different, what we call wardens of the bridge.
And the reason for that is not technological necessity.
So if we wanted to, we could make the bridge completely
trustless when you could just have it operate as a black box
secured by sgx. The key is only inside the And
it's nowhere else. But that's a little risky.
This is brand-new technology. We just built it.
We are really proud of it. Nobody else else has anything
like it. A lot of other coins are coming
to us right now and saying, hey, can we use your bridge by the
way? And but you can if you do this
thing that I mentioned which is where you where you keep the
private key only inside the bridge, then if something goes
wrong, if there's a bug in the bridge, if there is some Miss
execution, for whatever reason, then you Get into a situation
that you cannot recover from and that would be terrible.
So So to avoid that, what we did is we simply say, look, there's
some some secret here. It's going to control some
funds. We will split it up and divide
it to Independent parties. So that in case something bad
happens, then those same parties can reconstitute the secret and
get back at the funds. It's a Safety and Security
measure. It's not a technological
necessity. The bridge is true.
Is not trusted, or can be made completely, not trusted.
And the secret can be made completely local but as
dangerous. So for a while to come, I plan
to run the bridge in this current configuration where the
secret is, is distributed to multiple parties.
They are all independent. They are, you know, they've been
chosen not to not to be not to collude with each other.
Some of the new parties were platinum.
Silver plan to expand that set of parties, by the way, and we
plan to bring in just The quite a few bigger players.
So but we are very happy with the bridge and how it turned
out. I think it's represents the best
of the bridging Technologies out there.
The cheapest for sure. Definitely.
So I mean, when you look at like the history of bridges in this,
in this ecosystem, I mean, in the beginning, the idea behind
many of these Bridges was that Chains would verify each other's
consensus. And then this chain and chain be
and then some event X happens on chain B, and then you can submit
like a cryptographic proof on chain a and chain.
A can verify that cryptographic proof that event X happened on
chain B, and then it can take a dependent action-y based on that
proof. So we started off with that
notion, generally and then and then what happened was like the
space accelerated so fast that in reality, nobody could.
Implement, these kinds of schemes at a good enough level
to be used commercially. So everything boils down into
having, you know, like 5 signers or ten signers or 20 signers.
And that includes the bridge between Solana etherium.
Like many bridges around. The ecosystem are based on
signers, you know, some group of parties that are selected by
usually the foundations of the change that are bridging and
then these designers are possessing these keys and their
multisig accounts on both sides and they're doing the bridging.
And now of course, Avalanche has done a like a very big, you
know, operational Improvement on that set up by having the code
of the signers run inside sgx enclaves, where some guarantees
can be made about these enclaves subject to the overall security
of sgx itself, which is, which has been a matter of debate in
the general computer science and cryptography Community for 10.
15 years. Should we use sgx at?
All? Right, like, but Avalanche has
implemented that into sgx. But do you see in the future?
A new generation of bridges coming between say, 3?
Mm, and Avalanche where it doesn't depend on signers.
We're protecting something else Beyond signers or are signers
really the edge of human knowledge and the game is about
making designers more and more secure.
Sure, and that's about all we can do today, right?
Very good question. So, so first of all, let me
handle the the immediate question, which is so, what's
really going on behind behind the bridge.
Well, what's going on is you need to make sure that something
happened on chain a and therefore, authorize a
corresponding action on chain, be, right.
So Brian brought is cash over on chain a and now we have to give
him rap tokens. Chain the or vice versa.
He brought his rep tokens over. We have to give him the original
coins. And so you need to establish
whether or not consensus took place.
And so there are different techniques for doing this.
Depending on on what your underlying technology is, but it
all comes down to collecting signatures.
As you pointed out. Ideally, you would want to
collect signatures from everybody on one side, who's
affected, right? So, so only Theory em, everybody
who matters. Is believes that Brian brought
his coins over and then therefore corresponding action
should be, should be authorized. So, so that's a good question.
So how do you do that? It's hard to determine everybody
who matters, it's hard to. It's also very, very costly to
collect signatures from everybody on Earth.
If you try to do it, then this act of collecting signatures can
itself become a security hole because suddenly people can can
Dahl's You by asking you to sign a whole bunch of things?
So, so it's a, it's a dangerous. I mean, it's a complicated game
to play at some point. Most everybody realized.
Hey, there are only a few people, not few.
But there are only so many people on each chain that that
that really matter like buying ads matters if by Nance believes
that Brian brought his Fun's over.
That's important, - probably don't matter all that much.
But, you know, the lava lava lamps Foundation.
Toads. Yeah, that's It's Avalanche,
Foundation notes, that matters. So there are there are some
people are some notes that you can identify as as being
important in that ecosystem and you can piggyback your decisions
on them. And that's what most people have
been doing. Can we can we get to a mode
where we don't have these? I think it's hard man there
because if you do like as you start pulling everybody, then
that is a lot of cost for Buddy and depending on how the bridges
are used that, you know that those requests might be too way
too many in Lumber. There are people working on less
trusted Bridges. Like XLR is working on one and
there are many others actually, currently, looking at various
different Technologies for making that execution, faster or
cheaper or more interoperable, but I don't know of anybody who
will be able to beat the efficiency of an SG, X
implemented. Execution technology.
Now second Point iran-related tangent and I think I can say
this, I because I'm an academic academics love.
What do they love? They love intellectual
challenges. Let's put it that way.
They'll of tying their hands behind their back and solving
something that's, you know, that that you can easily solve if you
had both hands open, but now that you had one hand behind
your back, it's a different. They love these Sunday, puzzles
and secure secure. You're bridging or secure
execution, in an environment where nobody has any hardware
support is really hard. It's so challenging and there
are so many academics out there that made a living out of this.
They devoted their careers to these kinds of problems.
What other product kinds of problems that they devote their
lives to you know, there is somebody out there that we all
look up to. We love and spent a lot of time
multiple years, solving the problem.
Oval either neither assignment leader, election and ID
assignment in a, in a network that's organized, like a ring
where none of us have unique IDs.
Okay. So so imagine.
So, you know, essentially saying, look, there might, well,
be networks where we're talking the ring.
I can only talk to my right neighbor and left neighbor.
I need to elect a leader and everybody else needs to sit.
You like the same leader, and none of us have IDs.
And this, you know, this gets Maybe hundreds of papers.
It's a really interesting problem and it's really hard to
solve it turns out. But you know how, I people how
we solve this problem in real life.
We just look inside the ethernet card.
Every ethernet card has a unique number.
Okay, the industry makes sure. It's Unique.
That's your unique ID. It was assigned to you.
We're done. Just a little tiny bit of
Hardware support, just obviated years of research, you know,
once you have that unique number leader election is incredibly
It'll all of that work disappears.
So now if you go to someone like this, who's spent many years
build trying to build complicated, protocols and
algorithms and so forth. And you say look I've got this
chip. It does secure execution.
All your work, you know, it's kind of silly.
They will react and say well that's got issues with it.
Blah, blah blah. Yeah, of course, it's got issues
with it s GX has been broken a few times and every time it gets
broken. You know, what, how long does it
take? It takes two days and then
Within Days until has a patch for sgx.
So I wouldn't listen to these academics.
All that much, their nihilus. Nothing is good enough.
I could demux are by Nature just like those people in The Big
Lebowski, they believe in nothing, right?
So remember the Nile is there and nothing is nothing, could be
good enough and they always worry about the worst case.
Now, the bridge, of course, is a situation where you do have to
worry about the worst case. But starting with the premise
that the hardware is unhelpful is a silly story.
Starting point. So imagine trying to do, imagine
trying to dispose in back in the 60s.
There were people who were trying to do multitasking on on
regular computers, and it's really hard and they developed a
lot of cool techniques and they were all proud of them and and
you know, multics was doing cool stuff and so on.
But then the chip manufacturers come to you and say, hey we
added a feature, we added the a way to save your register set
atomically. And then suddenly all these
tricks that these people developed are silly.
And you just use that primitive to build a system like Unix and
the rest is history. Things just take off.
So do we need the complexity of all these complicated things?
No, I don't think we do. And then final third rant on
this topic. I think you are, you are right
on when you point out the importance of bridges.
I think the next year is going to be a battle of bridges.
Not the war. The war is various is really
big. There is like multiple fronts to
that war, but the battle is going to be with Bridging and
you'll see, at least a half, a dozen, new bridge Technologies,
come to the scene and the chains with the best Bridges.
The most fluid experience, the best user experience.
The cheapest experience are going to win and they will get
the TV L as we've been seeing in the case of avalanche.
So. So we're uniquely situated in
that battle. And we have by far the best
technology and it's going to be fun to see other people try to
replicate what we've done. And it'll be, it'll be
Interesting. So that's that's the next year
coming up. I'm glad about very, very happy
about where we are. And I just want to give you a
readers or listeners a heads-up about what to expect.
There will be lots and lots of cool, cool Bridge bridges, come
online. There will be some spectacular
Bridge failures every now and then and it's going to be a fun
ride. Cool.
That was sad. That was really, really great.
And I think that makes a lot of sense.
One thing. I also wanted to speak about it.
So the topic I've been thinking more about this topic of Mev,
right? So it may be on, on a theorem,
of course, basically - ordering transactions.
Using, basically, they're sort of Monopoly over this block
space to do things. And then, you know, now there's
been there's like no daps that try to mitigate that or, you
know, flashcards has tried to deal with it.
And it's interesting what that looks like in a non proof of
work system in a proof of stake system or and improve different
consensus algorithm to That I think affect this.
So I'm curious. Like, what, what are your
thoughts on? Mev, on Avalanche?
What's a, what's a great question?
I've worried so much about Mev really, really, really
interesting field. So for people who are listening,
so M even is this thing by which participants to your protocol
can jump in and an extract. Some value by jumping ahead of
other other natural transactions occurring in the system.
You see somebody trying to buy something on.
Say, you only swap use you, you jump ahead of them, you purchase
purchase ahead from them, and then I had ahead of them and L
to them. And, you know, that's the simple
kind of, you can sandwich their trades, you can do all sorts of
things to extract value on Avalanche.
So there are multiple different Avalanche deployments or
Avalanche protocol. So protocols in the Avalanche
family and so on till I would say maybe June or so.
Yeah until about four months ago or so five months ago or so.
We used a version of our protocol where anybody could
propose. A block in any slot.
Okay, so, completely leaderless and and so actually the current
protocol were using a still completely leaderless.
It's still true. What I said is still true, but
we added an optimization. So back in June, we added an
optimization and it's been a game changer.
If you use the initial Avalanche protocol with, where anybody can
come in at any time, then then a single Mev extractor with a
single steak. So, Brian comes along.
Size 11 units of steak and, and he starts doing whatever he
does. He can jump in, and he can jump
ahead of any transaction in any block.
Okay, so that's, that's what could have happened in that
protocol and that's what was happening in that protocol.
And and we got the ID, we could be heard from the Grapevine.
That there was some people, extracting multiple thousands of
dollars per day, maybe thirty thousand dollars per day, Etc,
from the system, this pay Al's in comparison to what can happen
on a chain like, etherium only Theory.
Mm. Many millions are being
extracted via Mev per day. There is a lot of money being
made by the miners because the miners are in a unique position
to to jump in at any time. So, on Avalanche, that we
noticed that this could have been a problem.
We immediately. Applied an optimization where we
slightly favored, a given given proposer.
In every slot. So, you know, so proposal, you
know, 37, let's say Brian gets slot 37.
He gets a slight advantage in slot 37, but otherwise, he needs
to be in line. There are maybe another
thousand, you know, miners our supposed acres and rotation.
So that suddenly reduced people's ability to jump in.
And and so that has had an immense effect, the amount of
Mev extracted. Avalanche, I haven't
characterized it, but has I believe it has dropped down
significantly by multiple orders of magnitude and and also it
creates a nice Dynamic if you want to be in the Mev extraction
game. Now, you have to buy a lot of of
Acts take and and participate in consensus as a first-time
consensus member. So that's been, that's been a
great change and and it made the protocol even more resilient.
But at the end of the day there is one Fence against Mev
extraction. That is there's
incontrovertible. It's the best defense and that
is, if you have a fast protocol, then Mev extraction becomes
really hard. So when your protocol is
lagging, let's say 15 seconds behind the real time, like it is
with, with etherium. Then there's so much Mev to
extract, you know, the future right people submitted
transactions, 15 seconds ago and there you are.
About the craft your block as a minor in etherium and you can do
whatever you want because you know how the prices changed in
the intervening seconds. And in the case of avalanche.
We are by far the fastest chain where the only chain that goes
from submission to completion in less than a second.
Our time to finality is 750 Ms. These days.
So we go from initial injection to being completely done with
The transaction in the blink of to, to just two blinks of the I.
So, like you do this and it's done.
And so it's so fast that the value to be extracted, is much
lower. That's at least an order of
magnitude faster than then other chains.
So it's an order of magnitude faster than a theorem is an
order of magnitude faster than Solana.
So, that's, that's how you, I think, eliminate most of the
Mev. And then these other
optimizations at the protocol level.
They create a nice Dynamic, whatever remaining value, there
might be goes down substantially.
So we've we've done. We've done a bunch of things as
I mentioned. So we are naturally I think
possess low value and with just a small optimization.
We managed to turn the game upside down and force the Mev
extractors to have to hold a lot of steak, which is a great thing
for the all. Vox token Alders.
So, I mean back when Avalanche was very early on, right.
So one of the things that I that I loved about avalanches that it
was the first, like, leaderless answers algorithm by which I
want to be mean, when you said leaderless consensus, algorithm
in Bitcoin, every 10 minutes is a winning minor and the winning
minor as a block. And then it can put transactions
into the block and it has full, you know, soul.
Volition about which transaction it puts in and then then came a
generation of proof of stake, protocols, which includes tender
meant? Which includes Savannah which
adopted, you know, these other family of consensus algorithms
that you mentioned earlier. Based, usually on practical
Byzantine fault, tolerance from 1999, where where there's again
a leader and that leader keeps rotating and there's a leader
schedule where you know, who the Leader is going to be and
whoever is the leader can put transactions in the block and
can can order them. And in avalanche.
What was very, very impressive, like very early on was that is
anyone can propose a block? And then the network can will
come to consensus on one of the blocks and it will discard the
other blocks, but this consensus will be built ground up by the
polling that's done by. By the various nodes themselves
and then it seems like what happened this seems like what
happened was that when anyone can propose a block then maybe
the network could split into validators that are naive that
are not able to not trying to extract any.
We at all, because they're just downloading some software
running it. And then, there are like some
very sharp validators at a trying to extract the.
Mev. They can try to position
themselves in the network. In ways that they can influence
which block ends up becoming finalized and they can try to
extract a movie and to sort of defend against that Avalanche
has somewhat of a leader schedule.
Now except that maybe leader scheduling is not as strict.
As you know, you notate the mint Enderman.
It's very defined is L then equally valuable.
Whereas an avalanche. It's like well if it's a then B
then C. But if, if a proposes that they
have an advantage, but if it doesn't send the block, then X
or Y could send the block and there's will get accepted.
It is exactly. It is a completely leader
schedule. Yeah, and so, with this week,
leader schedule, what what's happening is sort of like,
Avalanche in my mind, is kind of like, becoming equivalent 2010
DeMint or Solana or each to in terms of Mev, because They still
socially me. No.
No, it's or we become equivalent.
No, let me see. Let me think about that.
I mean some sense in some sense. So is that what's happening now?
I thought about this before and my conclusion back, then was no
it's going to forever be a different profile and hang on
but I do need to recreate my. My thinking, one of the things I
love about talking to you guys, is that we just kind of talked
so I didn't come into this knowing what questions.
Would ask me so so bear with me as I try to think this up on the
spot. So if if we were to take a look
at a system, like whatever tender meant, let's say versus
versus Avalanche with with the week leaders in place.
Then ya know there that that's true that the week leaders, do
give an advantage to a chosen person per slot.
That's definitely true. And in that That sense we are
similar to what's happening on other chains, the, there's still
a huge difference between being a chain.
That takes, let's say, you know, in the case of Solana like 15 to
20 seconds to I think 12 seconds.
Whatever. The number is 12 12 to 20
seconds to finalize versus a system.
Like Avalanche has taken less than a second to finalize.
So that's a huge reduction in Mev The Entity that can Direct
Mev does change. And in a leaderless system,
anyone can extract Mev at any time and with a weak leader.
Then there is a, there's a dedicated person was a
designated person who is in a favorite position per slot and
other people will find it very difficult to extract Mev.
So I think that change that optimization for Avalanche with
weak leaders was a good one. It drastically reduced, the
amount of Mev extraction. It changes the way you extract.
Mev as well. So anyway, you know, we can talk
about this at length and the bottom line is, you know, what's
the slippage you get? When you go to Avalanche, when
you go to, you know, you've bridged over, you're going to
use Pangolin instead of uni swap.
We're gonna use Trader Joe or Yeti swap or kind of canary, or
whatever, instead of whatever people were using on etherium.
So, what's what's the slippage? You get who jumps ahead of you
and and how much how much worse execution?
Get. And at least at the moment I can
just look empirical e and you know, my eyes don't lie to me.
The execution on Avalanche is incredibly good compared to what
happens on on, let's say, unique swap every single bit, every
single etherium minor is extracting Mev right now, all of
them. And the way the Avalanche
network is there are so many people who are securing the
network. And so many of these people
Pilar firsthand participants in the network that they just will
not do any of these attacks. So, that's, I think the big
difference when you have a designated minor class, you have
these people who are sharks. You know, how miners are right
there there for the money and only the money.
They are not really forward-thinking.
They have some calculations they've made and if someone
comes along and says, here is here, is some, you know, you're
some trickery that allows you to make more money.
They all jump and start using that trickery.
So that's what's happening on etherium, and I see no reason
for why that should change. We've seen this in the case of
Bitcoin miners, as well. They are completely
profit-driven. So they will do whatever makes
sense for their profits and an avalanche.
The way the protocol is, the vast majority of the steak is
not extracting is not extracting in a, my nodes are never going
to extract Mev, from any user. So, when, It's their time to
propose blocks. They will do whatever is right.
So that's I think a fantastic situation to be in and the Mev
to be extracted as far lower than than a system like like
etherium. Well that definitely makes
sense. I think like that's one of the
big differentiators of of avalanche which is like it's not
a very delegation heavy system. Wherein other proof of stake
systems because you have usually have limitations on the number
of validators. Inert Enderman chain, like you
probably shouldn't go above 150, validator do so.
There, you have to have delegation where I, as a holder
of tokens am delegating my voting power in consensus to a
particular commercial entity. And then when the these
commercial entities, then of course, they will have
professional Mev extraction systems.
If not today then, eventually, right?
Like the Nash equilibrium is is sort of Of everyone runs a Navy
extraction system and distributes that we are lower
commissions or something something else, right, but in
avalanche, because essentially, there is not a limitation on the
number of validators, anyone who has coins can become a validator
and so we hope can be that. Well, at least a certain
fraction of the network that is regular people.
Running validators won't have professional Mev extraction
systems now. That can be the hope.
Now, of course, there's going to be entities.
Like I don't know probably Finance has a lot of avalanche
tokens or the exchanges will have a lot of avalanche tokens
and they will have an avalanche validator, and they'll end up
running MV extraction systems in the future, but probably a
bigger fraction of the Avalanche Network compared to other proof
of stake. Networks might be one where
people are still running like naive code with no immediate
something like that. So that could be, that could
definitely be a structural advantage in in avalanche, 11
curiosity. I have about, you know, a
Villages like, is not technical curiosity anymore.
It's like in the, in the beginning, right?
Like there was Bitcoin and there were lit helium.
And these were there was a point where I thought these were the
only two that mattered and there was an earlier point where it
was just Bitcoin that matter and kind of both of us.
Seen those points in history and, you know, and now, there
are so many chains, most of them don't, but most of them don't
matter. But yet, it's like, even in the
change that matter, you see that like they are starting to
develop very distinct personalities.
Now, for example, that II couldn't go to the conferences
in Portugal, but but my friends tell me that there was a cosmos.
And they will soar on our conference and my friends tell
me that you enter the cosmos conference.
It was like, you know a bit like the earlier crypto nerds kind of
hanging out kind of atmosphere when he went to the Solana
conference. It was like it was like very
businesslike and you can see that it's like, I mean, there
are Wall Street firms that are now trading on Solana and you
can feel like oh there's this Wall Street energy.
That's like, you know, Coming into into that chain and it's a
different atmosphere. It's kind of a different
community and you know, like it's like a different go to
market as well. Did you see the discussion?
They had I saw a picture from you know, they have different
sessions and different lectures. They had one lecture on Solana
and decentralisation giant room, maybe like 15 people in it.
So so that tells you about about how much they care about the
centralization. Ocean and Solana in the Solana
community. That was, that was an
interesting sight to see. So you are absolutely right.
All these chains are developing their own personalities, their
own, ecosystems their own user groups.
So. So I'm curious where you're
going with the question. So yeah, and I'm like, yeah,
what's the you know, like what I mean one way of stating is a
what is like, you know, what what do you think?
Is that the target market for Avalanche?
Like what kind of Community or distinct subculture of projects
is Avalanche cultivating? Or I mean, what is like top-down
cultivation? What would you like?
But what is also like, what's that?
What do you think is happening? Bottom up?
Yeah, what would I like and what's happening?
That's that's actually I haven't thought about that too much, but
I can tell you what's happening on in the trenches.
We have a very strong user Community.
We have a lot of crossover projects.
We have a bunch of projects that got funding from from polka dot
or from Solana, even and decided that, hey, we need an evm chain
and these things don't actually work that that got funded us.
And so, you know, so Lana doesn't support the evm and
polka dot. Makes a lot of Is but doesn't
actually support smart contracts at the time, at least, so.
So we have a bunch of people coming over with, with build
contracts and so forth. So, how do I characterize the
average Avalanche user? That's a great question.
I would say that because of my reach, there's a fair number of
people who are technically savvy.
So, fair number of ctOS, cios that, that got in very early.
And they understand And the true revolutionary nature of the
technology that's been wonderful to have.
There is a large number of people who came to Avalanche
because it's cheap. So there is a large number of
people who are overseas and they kept watching all these
westerners. All these Europeans, get rich
and richer and richer and richer only Theory, mmm, and they were
cut out, you know? Right now you can't do a trade
on on etherium, on an Am Em and Less than 100 bucks is just, you
know, the slippage of the plus, the fees is going to be pretty
nasty for you. And if your entire budget is
$200, you're not going to pay like 50 dollars in fees, or $100
in fees. So those people were cut out of
defy. They had no place to go.
And so Avalanche, attracts a fair number of these people and
it has for them. Been a godsend.
I get every day. I get a whole bunch of messages
saying, this has been a life-changing experience.
The the and not only because of a Vox coin appreciation, which
it has done really well, but also because we gave them an
ecosystem. We gave them a home.
We gave them an accepting place, and the people who want to run a
validator. We you can just run a validator.
You don't have to partake in a para, swap auction.
I'm not part of swap para, para chain auction.
That's ridiculous. Crap.
That's just like stuff for the rich.
So so you can get into these situations.
And and be a meaningful member of the Avalanche community.
So we attract a lot of people who couldn't do that elsewhere
and they came to us. We have as I mentioned the
technically Savvy Community, you know, go into our channels and
you'll find a fair number of very, very, very informed
intelligent people who understand how these protocols
work, what the differences are. The other thing.
I guess, I would say that a lot of our users are new to crypto.
You know, we brought a bunch of new people in the air.
Area also grew during the pandemic.
So maybe everybody else also has this.
I don't know, but I do know that there's a fair number of people
for whom, Avalanche is the first coin they owned and that's an
interesting situation. Such people tend to be a little
bit more skittish. They tend to be, you know, when
there is the usual China, Fedor Russia, Fedor India Fudd, they
freak out a little bit more. If you have a bug in your
system. They think that's the end of the
world. They don't understand that these
things happen. Some regularity and they get
fixed but what it is whatever it is.
It's just part and parcel of having a lot of a lot of new
people. So those are I think my three
characterizing points there, are there used to be we were mostly
relegated to techies, but now Traders are coming in and
Traders. Come in based on two things.
The Traders come in when they see another another person with
Deep Pockets, they like to ape, you know, They see a rich person
doing something. They're like, hey, this guy must
be doing something, right? So, you know, that's fine.
That's that's a silly Behavior. That's what you know, they do
it. That's fine.
The other thing they do is they come in because the own chain
metrics are in their favor. If you look at our tvl and our
market cap, we have the highest TV L per market cap.
Okay, so I can't really comment on the price, but people people
who've got lower TV else than us.
Have Your markets caps. So we're in a very good
situation, High TV, L is fantastic.
People who see our growth patterns, they come in.
So more frequently. These data driven Traders have
been coming into to Avalanche, and that's been a, that's a very
different community. So they may or may not
understand the Revolutionary nature of the underlying
technology. We also have quite a few, I
would say normal people, so Just this is very important to me.
And this is actually one area where I I strive to
differentiate us almost. All of crypto is has been
appealing to the same kind of anti-establishment
anti-everything crowd, right? You know, they want to break
down Society. They want to break down the
dominance of the dollar and and have say Bitcoin instead or the
etherium. Folks.
You know, I've heard crazy things.
So what if, what if we build a system?
That is used to store, you know, terrible.
Terrible content. You know, it's okay.
Maybe that would be okay. And this was coming from from
very high on up and that's that's that's not where we are
coming from. I think I want to we know if you
if you wanted me to position us. I would position us slightly to
the more Humane side of where crypto is today.
So none of this like, you know, you lost your coins.
What's it to me? Or I got mine.
So screw you type, type people, but more of the, how are you
doing? I I know I will do well and I
want you to do well in life as well.
Type of people and more of the, you know, I could, I could go by
etherium and I could, I could pretend that etherium, is
etherium to all the while knowing that the theorem is
actually theorem one, etherium is a proof-of-work coin.
It is as disruptive and terrible for the environment as Bitcoin
has, you know, There was a huge disconnect in some circles there
and it's a little painful to watch.
So all these people who, you know, ostensibly they seem to
care about things ESG concerns, right?
So they care about the environment, they care about
social impact supposedly and then they go in and use
technologies that are, you know, 10 years old.
At this point proof of work is 11 years old.
It's terrible for the environment.
You should not be touching a coin like that if you cared the
least bit about The environment you want to leave a better spot
for the, you can't be using one percent of the world's
electricity to mine, your coin and that's what Bitcoin and
etherium combined do so, so that's that's one area where I
would like to make sure that we are everybody perceives us as
being different. You know, we are a fast chain
where a high capacity chain were a very versatile chain and the
people who understand our subnet infrastructure Etc.
The techies notice the normies will A while to understand.
But most importantly, I would like to attract delightful
normal reasonable people people who don't want to break down
society as we have it. People who want to essentially,
preserve what we have but make it much more efficient.
Make the rails more efficient, cut out the fat like even as I
speak right above the laptop. I'm watching Wall Street and
those people, you know, they are, they're The Gatekeepers.
They collect the rent. They collect.
They don't give you Service day, in fact, if you poor service,
they jump ahead of your your your order flows, right?
So, so people who want to cut that out and leave a better
world for for their children. That was, those are the kinds of
people I would like to attract. So, and, and I've done
everything. Everything, I know to do
everything imaginable at the protocol level to, to build
something that will appeal to them inherently.
And from now on, it's just a game of Mostly sitting back and
letting the sort of the usual percolation of ideas, take hold
and, and have people understand what it is that we have, because
I do, you know, it's, I think clear to me that we have
something that's far. Superior both technically two
other proof of stake coins and also value wise to to at least
some of the big incumbents in the space.
All right. Yeah.
And really best of luck going for the journey.
That's that's there to come. Thank you, mayor and best of
luck to you as well. This has been such a blast, I've
so thoroughly. I was not expecting to see you
today. So, great to see you beat
cancer, so great to see to have a great chat with you as always
as if it's just, you know, five years ago from where we picked
up, but from from where we left off and continue the
conversation, so great to see my hair back.
So great to chat with you again. Yeah, absolutely.
And hopefully we can do another one of those, you know, not not
so far away five years. Definitely like, way way, way
too far. So I think that would be fun and
I'm really excited to see what you know, happening in the
Avalanche ecosystem. We have our at our company
course while we have a few people who like quite into it.
And yeah, I'm also excited because it does feel like a very
spray elegant some of the design.
Fine, so and yeah big fan of your work for so many years.
So it's very exciting to see how this is coming to so much
creation. Now, thank you so much and thank
you so much for having me guys. So yeah, let's looking forward
to Growing the space with you. All educating people and making,
you know, just especially I should maybe mention this at the
in closing, our golden Avalanche is to bring into the space.
The many hundreds of trillions of That's are not in blockchain
form and the space only grows with with more and more value
coming into it. We built our infrastructure to
allow that I talked about the scalable consensus protocol.
We didn't talk about subnets. Maybe we'll talk about them.
We can talk about them at the future discussion, but we have
an infrastructure that allows us to to create essentially
blockchains for custom. Use cases that I open or
semi-open or maybe close depending ending on the use case
and but interoperable and so so we're in a unique position to be
able to absorb that growth. And we're also working to invent
new new assets. So we simply recently came up
with something called Aiello's initially litigation offerings.
Those are fun. And so in every way I've been
trying to grow the space. I've been trying to bring into
it, the people who bring value with them and and I just can't
wait to see. The space flourish in the next
decade to come. It's going to completely
transform what we do. Yeah, cool.
Well then if that, thanks so much, corn is amazing, and I
look forward to having you back on soon.
Thank you guys. Talk to you soon.
Bye bye. Best of luck.
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