Hello and welcome to episode of the show which talks about the
Technologies projects and people driving decentralization and the
blockchain revolution. I'm Brian train.
And I'm here today with Felix loge, who's joining me today as
a guest host. So we're going to speak about
Lots of different topics today, maybe we've happy days.
So Felix, I've been working for years for many years now.
Over four years at that correspond.
So you joined us about four years ago, as a research
analyst. And now he's the chief
commercial officer. Of course, one is super
knowledgeable about lots of crypto stuff, including staking
industry and other things. And today, we're going to have,
you know, a bit of a discussion. Just what we talked about.
We sort of try to answer the question of like, you know,
what's interesting. Thing in crypto right now and
you know, we have a bunch of topics that we want to cover
things around, you know, decentralization proof of stake,
interoperability crypto markets. Phoenix is going to tell us the
crypto prices at the end of the year so you can make your trades
based on that. But before we, before we go into
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let's get into our, let's get into our episode.
First of all, how are you doing? And welcome.
Hey Brian, so great to be here, and be on the kind of gas side
of a podcast for a change. I guess you already introduced
me. So, not much to add and looking
forward to the discussion today and talking to you outside of
work about crypto. My favorite hobby.
Yeah, yeah. Well, I mean, I gave brief I
gave some intro, but maybe maybe it would be nice.
If you can sort of give you your own life story.
Yeah. Yeah.
Totally told me. No.
Yeah, so I started out basically getting interested in crypto and
I was studying. I studied Finance in Germany and
I just realized more or less that I didn't want to join a
bank or become one of the big four companies.
And I learned about crypto through, kind of the internet,
just being active, internet lurker.
And I learned about auger initially kind of trying to
write my myself Master thesis about Prediction markets on and
auger, but then obviously auger wasn't like ready at that time.
So I wrote about that kind of another Block Chain topic,
ultimately kind of automated decision to work in the crypto
industry. That could leave found the
chorus 1, add on AngelList. Now we have positions again on
AngelList. If you want to check it out, but
yeah. Found her at their, it was like
super fitting to my background. One of the kind of rare at that
time to have a role that wasn't like super developer Focus.
And yeah, just was super interested proof of stake.
And now and started as a research analyst as Brian said,
been kind of trying to make staking.
Yeah, like understandable for people initially wrote a lot of
content steak economy newsletter.
It may be some people read that and kind of did work on more and
more things than course. One ultimately also like this is
development and just kind of things on the Business
Commercial side now for over four years as Brian said and
yeah, that's basically. So I'm here today.
They've been looking at a lot of different networks.
A lot of things that have happened in crypto through the
bear market and now the start of the bull market or wherever we
are right now. So yeah, I guess that's, that's
background. Cool.
Well, yeah, proof of stake. Let's talk about proof is take.
I mean, I guess we've thrown about to stake many times.
Mostly from the perspective of speaking with proof of State
networks. I think that has been probably
the most, you know, the dominant way that we have a type
center-right have sort of address the topic.
I guess there's also been I mean we didn't episode about Li do
once, right? So we've covered like liquid,
staking a little bit. Not too much.
I guess bison Trails. We had a one point on as well.
So maybe it's a bunch of different but you know proves
takes basically gone from A concept.
I mean, I remember we had batalla con, you know, 2015 or
something, talking about how it gave me some space, if we stay
quiet. So, like the notion proof
saying, it's been around for a long time, but now it's become
something different right way. It's actually like an industry.
So what's going on today in your view?
What are the most important sort of Evolutions in this taking
landscape? Yeah, I think one thing that has
been a topic since I started in blockchain over crypto and
probably even longer was this idea that the institutions are
coming. I guess they are still coming
slowly, but surely and I think it's it's also reflected in the
staking industry and the landscape where essentially.
Yeah, the the industry has matured a lot over the last
three years from Um, basically, I guess game of sakes where most
of the validator operator started out or tasers initially,
right? Where there was like, basically
some people that were interested in this in this technology and
started to run these. Validator someone even really
knew what they're doing. And in the meantime, like a lot
of best practices developed, and just prove sake, networks grew a
lot first of all, in number, but also, in terms of market cap,
and kind of Money to be made from staking rewards and
commissions for the node operators.
And I guess in general, the concept then became widely
understood in the kind of broader market and because of
its nature of like relatively easy to understand and
relatively risk-free yield in the proofs.
I guess. It's where that's that's I guess
an interesting field for institutional customers, and
they Have entered this field a lot.
So I guess to say what that means is in the end that these
customers have like different requirements in the end.
Then maybe thus takers that started out in 2018-19 to stake
where they would. Yeah, basically just delegate
from their Ledger or through metal mask or whatever.
They wanted of their choices. And now there is a whole like
other process involved due diligence.
And compliance for these players to.
Yeah, and the note operators that want to work with these
because clients that are on the institution side.
They need to adhere to their kind of or to these rules in a
way. I mean, I guess we can get into
that a bit, right? I'm sure you also have some
thoughts on that. Yeah, I mean it is interesting,
right because when I when I became interested in both in
cryptos, 2013 and what sort of this Bitcoin is Bitcoin, bubble
started one of the first ones and even then one of the main
stories that there was is over, the institutions are like coming
and it's like, even that they're going to like, and of course,
there were some examples then, right?
Yeah. Like, Overstock starting to
accept, you know, Bitcoin is payments and Course it in the
end. Well, now we hear many years
later, right? Nine years later, almost eight
and a half years later or something.
And yeah, it's still a slow, so slow process, but I think you
very much right that the, he's actually mini.
If you think about, you know, what do institution is do with
crypto. I guess, the first thing is sort
of The easiest thing is like, okay Bitcoin.
All right, you can just hold Bitcoin.
I think that's that's kind of like the the first thing you can
do. And of course hold that is also
something that we've seen happening, you know, for years
and, you know, maybe some corporations holding it on the
balance sheet custody, right? Being a huge topic.
And again, the custodian have generally been like, okay.
First of all, you know, let's live people to just hold Bitcoin
or something. Maybe hold some others.
Maybe enable like trading a little bit.
But then if you go like beyond that, you know, staking is very
attractive. I think, because it's, yeah,
it's easy to understand why it's low risk.
It is, you know, it feels like a bone, right?
With some save interest rate. It's quite different from defy,
right? Also, defy move so quickly,
right? Then if I have something here
and then next month is gone and something over here and I think
that's like very informal. Regulatory perspective also
seems probably like more of a mess.
So I think staking is is probably or he's one of the ways
that institutions kind of get into it.
But of course, it's still very slow.
The other thing. I think that stands out to me
the most sort of like one of the themes, I think when it comes to
staking is it's just the increased in complexity.
I mean, you mentioned this from different types of customers who
are in compliance. This is like an interesting
topic. So we at course one, right?
We've been doing a lot of work on compliance and it is huge
amount of work. I to basically then, you know
measure up to some of these institutional standards and
comes with a lot of implications.
So that's those are some things. But then there are other things
too that have brought like more complexity to develop to staking
in the valid rule, you know, one is just the Diversity in
different roles, right? So we have the kind of normal
value, the role of you checking the validity of transactions,
creating the block, checking the other box.
Proper propagating in P2P Network and kind of, you know,
creating those box, right? But then I know already
displaying all the rules like, you know, oracle's and in new
ones coming up, how how do you think this is?
What do you think? Either, that's going to be.
Yeah. Yeah, it's very interesting
question. I guess we started, I would like
originally, like a long time. I think there were a lot of
roles that people or protocol designers start off for crypto
economic protocols. A lot of them actually never
came about or maybe maybe didn't like take office as planned.
Like, for example, the polkadot fisherman.
It was for a long time. A thing.
I don't know if this is actually even implemented or how these
work. But in general, right?
People get creative with the the things that the note needs to do
to make the network work and in the end, I guess, as more
applications also, like, if we think about the networks, as
this base layer applications run on and then more value is just
on this chain, these roles become actually.
Yeah, quite important. And there's more competition.
I guess around fulfilling whatever this role is designed
to do. So, I guess in the validator
sense. Normally you're just looking at
your you're up time. Usually.
And I mean, that's also not the easiest thing so it depends on
the network, right. The Network's nowadays actually
also increase in demand for Hardware.
So for example on osmosis, right, you there there's a lot
of computation happening at the epoch boundary that needs like
Servers or better servers and I guess there's more State needs
to be saved. But then there's also another
dimension where, for some of these roles.
There's also like a certain optimization needed and I guess,
yeah, what were what we conceptually thinking?
It's probably that this optimization obviously will,
like some people will be better suited to, to kind of fulfill or
optimize these these for these roles.
And then they I will basically take on a lot of the market
share of these roads. So like if it's like a
competitive market, probably like only a few players will be
suited to, to do that. Some of the examples that come
to mind. Of course, maybe like, familiar
for people in the defy space. Is liquidations.
We're essentially. Yeah, there is some loan at risk
if the price moves. Now, the person that is the
fastest to I'm kind of get that transaction, the liquidation,
transaction, and we'll make the money.
So obviously, there are parties that probably better suited to
do that. Then the average.
Yeah. Told her that, that was a
participate in this. So I guess that that complexity.
I mean, I mean, yeah, makes it kind of harder for smaller
players. Maybe to compete in a way I
guess. Brian.
I don't know. What's your, yeah.
And I think that's it. Also sort of brings up this
other topic, right? That's become, you know, one of
the most talked about in crypto. It's also something that we've
been bringing up, you know, guests various times.
And you know, like people are thinking about it a lot.
It's topic of Mev. And, you know, I think anyone we
have on the podcast. It's like you're building a
Krypton Network thinks about this.
And I mean, what is Mev, you I'd be have also done some podcasts
about it all, but any of these Circle around the, the ability
of the block producer to, you know, decide on the order of
transactions, although, I guess the term is sort of used in
different ways that sometimes also includes, you know, people
who are not actually the block producer, right?
So when you, you feel emotion, they would talk them as a
Searchers, right? So the people who basically look
for some kind of opportunities to like reorganize the
transaction to put in particular.
Stir to make money and then, of course, if you think of these
roles as well. Now, let's say there's some
crypto economic mechanism and expect some transaction.
And for somebody who like putting that transaction, they
can earn some money. Then of course, if you are the
block producer, then you can basically, you know, you have to
Monopoly, right? You can say it.
Like you can say like I'm going to put my transaction first,
right? And if there's that money to
made, you can make that money, you know, examples of that are
like, let's say liquidation right on maker.
You can have some CDP or basically, somebody borrow
money, you know, put up collateral the cloud or drops in
value and somebody can liquidate it and earn something.
And then, whoever does that first, right?
Basically gets like free money and then of course, if The
validators or the minor right at the moment, but the validating
frou-frou sake networks. It has the ability to do that
but has the ability to do that does require like understanding,
you know, the contents of the block analyzing those things.
May be analyzing the transactions that coming in,
then, you know, executing that and some kind of real-time
fashion Society, pretty complex and something.
That who does that today? It's I think probably just in,
like, small amount, it's being done.
But if you think, I think of the future of staking light is going
to become like a very big thing. And of course you didn't have
also the counter Trend that and I guess that's where I mean.
He's very, you know, controversial stand people say,
oh, but maybe that's bad for the network.
Sometimes it can be good for the Oracle bath but network, but at
least it's something that they need.
And also protocol designers application.
Design is no try to deal with in different ways.
I mean, for example, right, we've had cows swap on here
before, right? Or I think and their, their
Twitter handle at least is Mev protection.
I don't actually understand like, but so, you know, specific
decks developed around that. So, but I think that entire
thing is it's just a huge. Topic that's going to, you know,
be something that will give work for many different parties for,
you know, like many, many years and your the outcomes kind of,
you know, it's very, very little heads.
Yeah, I guess like from from the node operator perspective, in
terms of you. You're kind of forced to deal
with this topic in a way because yeah, most people realize that
this is big because we saw it on the theorem.
We know there is definitely a market already in it, will
probably grow. Of course.
There's also people building tools to like, make it more
accessible maybe two smaller. No debris.
So I guess from the perspective of who is well-suited to do
that. Maybe there is some scenario
where You know what, operator can work with searches through
some tool and still have the same opportunity as like a
bigger operator, but still just in terms of like it's one of
these things where that you have to think about as an operator.
So it's not just about you know, keeping your server up and
there's there's a lot of things that that go into being
operating these nodes and at scale especially so I guess our
one of the topics we want to discuss with Rhino me talked
earlier what we Gus is kind of, this is idea of yeah,
decentralization. What are the kind of forces that
help it? That has a temperate?
And I guess Mev seem just one that probably is a centralizing
for is in a way. I think.
We also just came up with a few other things or I guess we could
discuss some other. Yeah things that maybe increase
or decrease in Translation, but you what it's like things that
you. So we actually mentioned
compliance to mention Mev. Other things to come to mind.
I mean, there's definitely various things that I think are
driving towards the increasing complexity of validation and
then increase. And of course, that means that
if you can invest more in it, you know, you can provide a
better product, and you can get more customers and you can
become bigger, right? So that you have those kind of
Dynamics. I think, they're there.
Of course. You also have other Dynamics.
I mean, you know, one thing is just That, you know, when we
started with course one, but we didn't like there was not really
like a template for how to do it.
Right? So there was, it was a lot of
work to figure out how to run a validator.
But today there's lots of Open Source tools like lots of guides
right like so that to that, I think that barrier initial
barrier to just, you know have a value to run on the network has
gone down, you know, a lot right there mean.
I think in Cosmos for example, it Like very easy to do it.
You know, that's one thing. Yeah, I guess there's liquid
staking to. Like, it's taking could be sort
of like decentralizing and centralizing in different ways.
Right? So you can have, let's say if
you have something like light or as an example, right?
You can have on the one hand. It distributes the steak too
many note operators. So that's kind of more
decentralized, right? Then what?
Would you have as a normal outcome, but then at the same
time more control that shifted to, you know, like the
governance of that governance token and so you can have sort
of like some some degree of centralization again at there.
And so that's that's also interesting.
You know, that interplay. Yeah, I I found this always
very, very interesting and I guess we saw the stay key
mechanisms shift, a lot since kind of taking came around
right? Like I guess early Cosmos and
Tazo started with this model of Delegation.
So you're actually able as a total order to stay even though
you don't run the nodes which enabled, I call this these
businesses that now run notes for others.
And and then I guess here, I'm kind of made a shift from that.
Where it's like, oh, you have to hold the ether yourself to
validate, but then of course, someone came around and realize
there's no opportunity to build like a delegation protocol as a
smart contract, which is essentially Idol and and give
that liquids taking Dimension to it, which even makes it more
attractive than the native staking.
So I think, from my perspective, what this is also like I guess
if we're thinking about protocol designers, designing their
protocol to minimize, Mev. I think they should probably
also think about Out designing the protocol to minimize like
having other protocols take like share from their core mechanism,
which in this case, I guess it's taking where now it shifts to
lie to as you said, right. The governance is now with
lighter instead of the portal called 7.
Maybe it would would make more sense.
I mean, I don't know. Actually, if that's true, but
that's kind of like what I was thinking that maybe if you have
this kind of natively in the protocol that the steak is
already liquid, then, I guess you're taking a little bit that
opportunity away from On to make like a drastically better
staking model, then you also will actually curious to hear
Brian. What do you think about that?
You mean you mean because if you have an outcome where you didn't
have like, let's sail, I do which controls a lot of the
stake that then apply those in a strong position to basically,
you know, extract, Mev, and that's kind of your point.
Yeah. Yeah just that also like
distribute the steak. How lighter one and maybe maybe
it would have been. Yeah, like better that the the
from the start we have like a protocol that is like liquid
staking. I think it will go on one of
them that now comes around slowly to it.
I guess it's Cosmos where there will be these delegation.
Voucher is design where now you can't organize your delegation
on the on the Hub or you will be able to and then That can be
used in different composable ways.
So that's kind of like natively built into the protocol instead
of having a separate thing. And I think that's a pretty
pretty good idea. Yeah, I mean, I think one thing
that's like interesting sort of like on this point is this, you
know, like you wasted so like I'm Cosmos, right?
That's anybody can like spin up a validator and you have to have
like whatever one atom or you know, one token and whatever the
the coin is and and then people can take with you and you don't
have to have Capital right now. Tasers was already kind of
different there, right? Because tasers required, the The
validator, they call the baker to have 20% of the of what other
people steak with you in their own wallet, right?
So now if I'm like, some random guy who wants to start like the
tasers Baker. Well, that's kind of creates a
big barrier because if I don't have to taste these myself, like
I have to go and like figure out some way to get tazed.
He's before people can actually stay with me.
So like I guess the idea of tasos was that there would be
some sort of, you know, skin in the game for them and maybe hire
security but I don't think that played out like that, right?
So I thinking practically speaking, there's never been an
issue. Let's say on the cosmos networks
that you know about it is don't have their own steak up because
first of all, there's not really any attacks they can do that
will give them money and They reputation Sookie.
So if they did anything, then people just like go elsewhere.
And so I think, but the but the effect is been right at then the
the violators or the baker's have to have a lot of extra
work. May have to find Wheels create
legal contracts. Actually.
We have kind of dealt with that and and I think in the end, it
has a crazy barrier to entry and instead kind of like, the
centralizing thing and And of course the theory.
Mm, I mean, it here, I guess that's there was like, so one
guy we were in touch with quite a bit in the beginning Cosmo.
So I could see was running Cosmos validator at the gaming
space and the launchers Ryan Adams.
Who, of course, has become. It is done like fantastic work
with bankers and graded like, you know, really great podcast
and media thing around mostly theorem and defy.
But you know, he was making this tweet.
They are like, oh, you know Cosmos staking is a cartel and
too centralized. And yes, interesting compare
that with like if urea, right? Because only theorem of course
you gain have this thing, as you said, right?
Like I mean, yes, it's easier right?
For me as somebody who has, let's say, 32, 'if and I want to
run my own validator, right? Like I can do that, right?
Whereas in Cosmos, you know, the least valid or may have like,
let's say, 2 million or Nothing like that of Adam to take down
the Christmas holiday. So, you know the barrier to get
in there is higher but from that perspective, but you have to
have the capital right and And that's a huge as the huge
centralizing effect. Yeah, I guess, on that, right?
I mean, for one in Cosmos. Also.
The nice thing is, there's many Cosmos chains, right?
The ideas. We have many networks, and
there's also like networks that have a lower barrier to entry
where you can get started and start a validator and get
familiar and make your reputation.
So I guess that's one point and the other is also write as you
said you need the capital. So what I think Happens.
Is that sure there's probably more people that run like notes
on their own with their 30 to eat if they have that much,
which is also like already. I guess it's pretty substantial
amount and and then but that's kind of like a very long tail of
node operators or like in terms of percent of General steak.
I feel like that's a very small minor fraction.
It's probably not even very clear how much it is, but I
would assume it's less than 10% and we'll probably Never be
progress at five Yuan. And so what is actually the
impact of that is probably not that much and then on the other
hand on the more extreme side as I guess you have more
centralization because it's so hard to build this delegation
model on a theorem that really only lie do as like a because
taking protocol can do it and maybe like centralized exchanges
can do it. So, there's really like, only
like a few very big players that than get a lot of steak and
probably, in terms of Of kind of how many people it takes or
entities. It takes to reach that threshold
of something going wrong. Like, I guess that's what you
should optimize for, in a way for the proof of stake Network,
right? That it's hard to attack the
network. You may be Distributing the
entities. I would almost say that probably
in terms of this Nakamoto coefficient or however you want
to call it. Maybe the costume design is
actually doing better than you theorem at least right now.
And so, yeah, that's kind of my view on it.
Yeah, I mean the thing that seems pretty clear.
I think if you add up like whatever coinbase cracking and
finance or something, then I think you are going to be above
a third for sure on each cerium. And and your cause.
And also I think one thing is I actually theorem hides a lot of
it. Like you don't really have that
much visibility what's going on. Because, you know, of course,
that's also one of the nice things about the cosmos model is
that there is this aspect of like I can look at the value.
Layers and I can, you know, there's like the not the name
and the website and you can like steak with them.
So there's this, you know, in a way it's like this advertising
board where like people can show up, people cannot do something.
And, of course, it's not so easy to get delegation, right?
You have to stand out somehow but much much easier than to,
you know, convince some, some institution, I guess.
Still like, you know, basically, you know, build some solution
where you can, you can take a 8th.
Yeah, I think that the upside of that is also like, now you have
this, the validator has some kind of identity, right?
There's a reputation as you said attached to it.
There is all that I think if you get rid of that again now all
the valadares and animals so really they don't care about
anything. Maybe about about the Yeah,
there's steak. And I guess that is also like
maybe less secure, right? Because now with this reputation
of your thing is on the line, your brand, is there you
actually kind of increase the security I guess, because you
have all that on the line. Whereas, if you're just like a
string of numbers, like, let's say on Avalanche where right
now, if you run a note really, you just see like a string and
you don't really know who that belongs to.
So if they misbehave you wouldn't really know who was it
and they could maybe like launching, you know it again and
get steak again. And That probably wouldn't
happen customers like that. Right?
Although, like, I guess the flip side of that is that, you know,
the if you look at like a cosmos Network, like the entity is
running that are basically identifiable, like you can be,
you know, you can figure out at least for most of the okay.
Where are they? Who are they, you know, where's
that company? So I think in terms of You know,
pressure from government. So, you know, maybe some
regulatory, Crackdown it may well be that the theory or model
might be more resilient. No, I would say it's still
probably for a government size actor.
Easy to identify it. No, it's Lydia.
So, we talked to me about liquid staking.
Where do you think that's going? Yeah, I think it's still, I
mean, we've been feels like a long time but I guess even
people that were really in the space is like only two years
since people started like thinking about it and then
probably like bit more than a year that something is life.
And I guess most of it is like I do, right?
And lighter on. If you, I'm kind of being the
poster child for a liquid staking and a lot of things
designed around that, I think there's been a bunch of
innovation since then already, and I would, obviously expect
there. To be a lot more Innovation
coming since. I mean, I guess it was taken for
me is also just like a extension of General staking design that
kind of takes into account defy. And yeah, right.
Like we've seen a few things already, like some Innovation.
I guess we'll see more and we'll hopefully I have competitive
market and see different models play out and succeed and
probably it will. Yeah, definitely be.
I mean That's why I guess, of course, one.
We're also very interested in because it's like, Also like the
destroyed, we have to kind of deal with it because it kind of
changes the model. Like who is your customer now?
Now you have to stick with taking protocol, I guess as a
customer which two years ago didn't exist as your customer
potentially. Yeah, and then these protocols
can all have like different ways, how they steak and you
could probably yeah as an operator you would like try to
optimize to get in that set. I guess we talked about about
light. Oh how it works there.
Where it's more like a Ninh space decision.
And essentially you need to like prove that you have your of your
setup of kind of track records and send the application and
it's a bit more like that the whole system and then there's
like some algorithmic solutions right now.
I guess like, primarily like some, some people that innovated
are essentially, what, okay, so originally this lot of
foundation itself with the, their stake pool design, that
kind of try to look at uptime and Different kind of objective
measures to to decide where the stake is delegated, and then
marinate and social. I think kind of build off that
and built like liquid saying protocol that does a similar
thing now, sure. There's like more designs to be
explored there. And I mean, I'm just excited to
see some of them one that comes to mind.
Of course, where we have explored is now being
implemented by quickserver. Kind of Spin-off, of course, one
where they are building a system where essentially, the holders
of the of the liquid s open can kind of signal their preference
when they initially meant the Sega talking to which validated
the state should go to and through that basically the
validator set is formed. I'm sure there's like a lot of
other designs. One thing I could think of is
also like maybe there could be something that just mirrors the
existing valid. It said and distribution error.
I mean yeah, Lord knows what's there?
I guess. Yeah.
What's your thoughts friend? How do you expect?
It's a good question. Right?
Because I think at the same time it's a I think the pieces around
liquid staking think is also a little bit that, you know, you
gonna have this liquid staking asset, that's being created.
Let's say, steak beef. And you know the ambition of Li
the and I think this is true for, you know, many proofs, take
many existing. Protocols.
Is that then This token actually becomes kind of, you know, the
token that is used right. So, you know, I hold safety for
my role at not, if you know, maybe you have poodles on a
M&M's that have, like, safety pairs.
It's used as maybe some sort of Base token in defy applications.
And of course, as big benefit, right?
Because then all those tokens wherever they are basically, you
know, like accruing saving Rewards.
Amen, I think the, I would say the thesis is a little bit that,
then you have this, you know, sort of ossification right.
That becomes like the standard becomes like, super hard to
disrupt becomes, you know, like it also winner-takes-all
Dynamic, potentially, at least can work out like that, but I
guess we'll see. But I think there is, there's
always SLI a benefit to having, you know, a lot of liquidity
crew around. A particularly good taking acid.
So it's interesting, sort of asked.
You know, how how much evolution is it going to be, or is it
something that kind of, you know, become sort of solidified
and, and it's then dislike layer and then all the things are
happening on top. I'm yeah, I'm so, I guess I have
a little bit question if the same EB change things,
fundamentally Maybe Not right. Maybe, it's, maybe it's sort of
like, let's say I hold steak beef and then on a somewhere
else and maybe happens and maybe changes what mistaken rewards
are and what the valid is do, but doesn't really change, you
know, that your C20 a hold. So maybe it doesn't
fundamentally change the liquid staking model or like, but, but
maybe I don't know. So, I think that's so kind of
like an open question because I do Think I mean, he's gonna
change a lot and so I'm wondering if that's going to
impact, you know, kind of bring new new models like you saying
that maybe are able to out-compete and really existing
ones. I think a, for example, I guess
now some of these liquids taking Solutions.
Look at The algorithmic ones at least.
Try to like, find the most performance validator, which
often is just the one that has like, zero percent commission
rate. So, I think a lot of the
algorithmic solutions on Solana right now, they basically
delegate a lot to, like, loafy validators and that.
Also, I kind of obviously means that these operators of these
notes actually don't really learn.
So, like kind of the money goes away from the note of where it
is, and I don't think that's the long-term a good idea in a way,
but I mean, maybe if I'm Evie is there, then they would pick
notes that do better on Mev. So it could again kind of lead
to that because I guess if your liquids taking protocol really
like your main product is the apy of your and the Integrations
of course, which is mostly the goal of the degrees is also to
increase the apy of your, the holders of the liquids taking
acid. So yeah, like yeah, remains an
interesting to see. I think we have I'm still very,
very early. I think that's another, you
know, another big Trend right big thing.
That's happening is just a tea, you know, interoperability is
really no really starting to happen because there is I mean
been work on this for, you know, a long time.
We had early things like what was it?
Like the beat go, you know, PTC only Theory, mm, that was like,
you know, custodial stuff like that, you know, but then, you
know, then you had You know, bunch of different Bridges, but
now I think, for example, IBC write a scene like pretty
massive adoption. I haven't seen, like, I'm not I
haven't really looked at the numbers recently.
I think the house Moses did like 120 million, IBC volume in the
last day, I guess overall 134 million and one day over a
hundred thousand transactions. So, yeah, I mean, that's Because
I mean remember when it launched and then it was like new, a
million transactions within like a month very quickly.
And now, you know, it's mostly Sloan doing 100,000 a day.
And and so I think I use he's obviously doing tremendously
well, like getting like a huge amount of adoption.
A lot of new cars, must change the launching.
And I think the interesting thing there right is that IEC
still? L.
You know, IBC is a generalized protocol, right?
Where you can pass messages and then you can do different
things. But like, right now all that's
happening is basically token transfers, right?
Like nothing, nothing else like but you even now I think it's,
you know, it's not life right on the cosmos up this entertaining,
count swing and the ancient accounts things pretty cool.
I think the ancient accounts basically means that you can
have, you know, an account and one That's like controlled by a
messages from another chain. So like you could imagine, for
example, let's say Cosmo. Stop holding awesomo on osmosis
and likes taking it or like vote.
For example, you could have like, you know, cosmas how could
by osmosis and geike both in the governance on the osmosis
Network? And that's just one example,
right? I mean, I think there's this and
it quick Silver. Right, that example, right is is
where you basically say that, okay, you're going to have this
one chain that has an account on another chain with weights,
taking through it. But then issuing a liquid taking
asset on the host Jane. So let's say you have like,
let's say quicksave were staking atoms on the cosmos hop and
then, issuing some sort of, you know, Quicksilver atoms, which
is another token that Similar to the steak beef and I do.
And so I think that's digital use cases that this opens just
gonna be mind-blowing. Actually hard to wrap your head
around. What exactly will happen.
I guess it will. I mean, I remember some years
ago. That was the web was he called
the polkadot conference and then, you know, someone a
deguerin gave a talk. And someone asked, I think it
was Dennis from, he was a security at a time, but he has
like, what about composability, you know, you have these
different pair chains and then like isn't the great advantage
over here, IAM, right? You can you just build on top of
each other? And, you know, somebody bids me,
you know. Safety first.
And then you can put the steak even to curve and somebody else
build something else on top and like how does that work across
chains and until now it doesn't work so well, but I think we are
on the cusp of that starting to work, you know, pretty well and
maybe one more point on this. Like one thing.
I found super interesting. I recently did a podcast with
the near guys. And they in their smart contract
model. Actually all of the Crofts
contract interactions. They said kind of working this
asynchronous way in the same way that like, let's say Cosmos Hub
would interact with something on as Moses or something on Tara.
That's how even on the same chain on near like this works.
And and I think that was like very interesting and it's kind
of like A good case for just how well that might actually work.
So I think this composability thing on being on the same chain
is going to be it's going to look a lot less like a lot less
of a Advantage. I think I mean still going to be
some Advantage but I think it's yeah that beer design is really
cool because I guess in the end of the thing they're trying to
solve was that people would want to be on the same chard as some
Popular application and everything crowds there because
it's faster, right? So, you avoid having that which
I also find pretty interesting and I guess yeah.
Nowadays. There are a lot of solutions.
I mean IV stands out because actually I said it's protocol.
It's very trustless or trust minimized.
I guess versus I think, on the other hand, we have kind of
other things. Emerging also, like, I guess it
seems, there's a spectrum, always right, but I found But
very interesting from Terra from the start kind of Trailblazer in
that space initially with Tara shuttle a bridge, which was very
very centralized and then but like starting to get assets from
other chains into Tara to kind of supplement.
This anchor yield, right? Initially, I guess III so B.
If and now for example also be sold soon where they actually
switched, also the bridges from that fair.
Bridge to Wormhole, which is, at least, I guess another is
another protocol. It's again, another Network in
and of itself, but I guess it's more distance than having one
and then IVC or like other protocols, like this being being
like, the ultimate may be a solution of of about Warhol is
also that he has an insurance fund it.
Yeah, IPC has unpaid re layers. That's the yeah, so Yeah, I
guess yeah, a lot of things are happening and and sometimes you
know, the bridges are like a slower than the demand for cross
chain applications. I think that's what Tara
realized very well or like trusted collateral.
And they really that's that's I think a big part of why became
so popular right now is like, so dominating so much because it
really like after cross chain bringing both UST to other
trades, but also bring collateral.
Other changes to Terra itself. So I it's really fascinating to
see. See what's going on there.
Yeah. Yeah, I mean, in a way, I think
it's a good point because in a way, I think Tara is like, the
most advanced cross chain application even even something
I could samosas. Okay, like I mean you have a lot
of other assets coming on to, as Moses you trade them.
But like, actually tear our has a lot more sophisticated use
cases, right? Where you have to, you know, you
see going elsewhere and I think they are.
I am personally, me know, there's a lot of like questions
around UST often how sustainable is it?
And but I think it is a I think it's absolutely brilliant
strategy to use other crypto assets as like, you know, some
kind of backing in addition to Luna so that you have both the
scalability of being able to like increase the UST Supply
fast, but you have This like decentralized kind of acid pool
backing it. And I think if you think of like
the if you think of just how massive this use case is like a
decentralized stable coin, which is enormous use case, right?
So I have been I think it's very cool and still terrible
confirmed. Yeah, I think personally, yeah,
I it's a great strategy and I think the one thing where I,
what I would find cool because in the end now it's a lot
reliant on like the the assets that cover the other trains are
through Wormhole. Mostly.
And I think that's also like a big risk, of course, to to
Anchor. If there is something really
goes wrong. That could also be a problem.
And I guess that's where the Entertainer counts kind of come
in. Because, in the end, ideally
Tara codes use that. And have like osmosis or IBC
enable the essence there and maybe they have like a little
bit or like at least diversify the bridges.
I think that that would be cool. But ultimately like have a
bridge that is probably like yeah, IBC based.
And obviously, Tara is build on the cosmos SDK so should be
possible. I guess.
I don't know exactly the details but I would fight that pretty
cool. And I hope someone in Terrorist
looking at that too. Yeah.
I think this is the other thing that has been like into.
I think that's interesting about bridges right?
Where R. To me, it seems that you have
two very different. Approaches.
Right? Like you have IBC, basically
have like like client on each side and then, you know, you can
just put asset in between and of course, the nice thing is that,
you know, the cosmos are validated.
For example, they don't also have to run validator on, you
know, some other chain. Nobody has to basically do
anything on the other chain and you still can have this
connection between the other chains.
So it's like, you know, very permission is very open like,
you know, Fantastic Model. And working super well, but of
course, a big downside is you have to have that light client
and the light client works. Well in, you know, between
Cosmos as UK in kind of comes out of the box, but then you try
to do that with, I don't know if you're IAM or like a lot of
other chains Solana and it's super hot.
Actually, we did a bunch of work of course or one drive to
basically do this kind of cell 0 Cosmos and building, you know,
Cosmos like And then solidity and, you know, kind of work.
It was, you know, very challenging and, and I think
that's where you have to the power of something.
Like, you know, the Wormhole axle are where you have, you
know, Central set of actors who can like, run lots of different
chains. And then, yeah, and of course,
you have to path dependence either, right?
So, that's something they get is.
So I think in the end, both of them are going to be like, huge
Success, I think both approaches.
Yeah. Yeah, I agree.
There's even like I guess even more approaches with the
optimistic Nomad design which is like Southern between one.
Yeah, don't make me try to explain it.
But I guess. Yeah, I mean in general I think
yeah, definitely been I guess the Hot Topic in the last few
months or actually even weeks disparate interoperability.
And will remain. So and I guess IBC is still kind
of under the radar in The Wider sense.
I mean, we were also at the Avalanche conference and of
course, we have a something Avalanche fans in chorus one,
but I guess they are also, it was, you know, there's the
something that was kind of similar to the cosmos zones.
And then there is also supposed to be a interoperability
protocol, but it's kind of not there yet, of course, and I've
seized there is being used today.
I guess they're then there. Yeah, we'll see.
We'll see how that goes. And even maybe how how the
interoperability between because I guess between finality fast
finality trains, the IVC connection should be easier this
like client design. So I guess more chains could
that have that could adopt IVC by.
I guess it's always like the thing with standards that you
have to convince people to use yours.
Yeah. No II do think that makes sense.
Right? So I definitely think IBC will
spread Beyond. Cosmos SDK networks part.
Of course, it's it is always never going to be a solution for
like connecting to bitcoin or, you know, various different
Networks. Okay, so the other thing I
wanted to maybe final topic, I wanted to touch on is sort of
the topic of crypto markets. Now, it's something we like
hardly ever talked about on this podcast and also something like
I don't feel I have You know, like great insights in.
I'm basically always optimistic, always thinks, always think
things are going to be fine. And then like, you know, in
retrospect they can look back and like, 2018 is like, should
have been obvious that this is like a bobble iron hat.
I mean, kind of kind of like kind of recognized it the like
but then I was now, of course we do have Interesting times like
in the world. So maybe, you know what?
What are the interesting times? Probably the most interesting
one. I think the most interesting
aspect maybe inflation now, because I think that's mean,
maybe there's, you know, the one is, is monetary tightening,
right? That lucky.
I've had for many many years yet.
I Central bank's, you know, like issue, you know, basically, Is
the money supply. And then, of course, what
happens? We've all the money like that
has to go somewhere goes to buy of assets as the prices go up
and you know, it's interesting think of real estate.
Right? Like if you're like in a real
estate investor, then probably you entire investment career
like the 30 years. Let's say you've been around for
a long time, right? You can invest in for 30 years.
You spend the entire 30 years investing in an, Iron meant
we're basically interest rates were going down.
And of course, if interest rates are going down, then it means
that if you just do this like discounted cash flow, right?
You take all the future income streams and you take and you
basically say what's the present value of those future streams.
If the interest rate is lower, the value of the streams in the
Futures is goes up. And so you guys, you have this
situation that basically, Because of the change in
interest rates, you kind of bound to have continuously
increasing prices. I think we.
So like used to this and I mean who remembers like Kaiser High
inflation. Like I mean that was in the 80s
right in the 80s. You had that high inflation in.
And so now it's weird right now, you all of a sudden having a
higher inflation, having this monetary tightening.
Of course, you have the whole war and Russia and stuff.
So, and I was, I was reading, like, Arthur Hays, you know, he
wrote a great post fantastic writer.
So that, you know, the big makes it makes founder, you know, he
was, he was basically being very bearish, right?
He was like, okay. It's I think for other reasons
as well, but it's just been like thinking a little bit about, you
know, what is this interplay between this macroeconomics and
crypto and was going to mean for crypto markets.
He's like a bear Market ahead or maybe not.
Do you have any thoughts on that?
Yeah, I guess we come to the section where we predict a price
first. What's the Bitcoin price on on
New Year's Eve? I can only I guess I'll say
that. I mean for the longest time
right there was this scenario that like everything will
credit. It's been around for a while.
I guess. Now, we're at a point where we
also have this war on top of everything and I guess we had
covid. I guess that was also already.
The first time where we thought maybe Now, everything's falling
apart in this asset. Bubble is crashing.
Now. It's kind of the war, but who
knows if it's actually going to happen, and then I guess it's
the second thing. Let's say, if we come from that,
what was happening to crypto, when that happens like, for the
longest time, right? It also at some point, the, The
Narrative was that the a Bitcoin is just hedge against the other
assets because that fails, then everyone will flee to bitcoin as
the safe haven. I would actually say, I think if
If this all collapses, then probably it will still also mean
Bitcoin. And crypto would also collapsing
wouldn't be that crypto does good in these times.
So I think it will still be correlated then in terms of
like, you know, it's this the Mania over.
Can we further increase everything?
I guess? I don't have a Good opinion on
that and what time frame that is or what's the, we know in the
world where it just keeps going like this.
Or does it have to fall apart at some point?
Yeah. I mean, I think you, of course.
Do you have a bunch of trends that are like very bullish
crypto and they're not stopping right?
Like I think, first of all you just have the advance of the
technology and you know, like We talked about a bunch of stuff,
right? Like Hoover staying
interoperability like so many other things and if he's
experienced everything's getting better scalability rights
capabilities getting solved. I think it's pretty clear like
so you can have like abundance of cheap transaction.
So all of those things are progressing and there's so much
money in this space, right? So much funding that even if
there is like a pretty traumatic bear.
Even if there is a big crash, it may slow down things a little
bit but it's still going to progress, right?
Because also many companies in the Crypt space they have, I
mean all the exchanges, right? They have like huge more money
than you never spend. The many startups have raised so
much money. So I think that's just
progressing, right? And then I also think mainstream
adoption. You know, we have seen nft.
So I'd bring in lots of users. And and I think that's also
going to kind of continue. I would like, new New Year's
experiences, new maybe games. Like, I don't think that's gonna
stop. Even if the market goes down,
right? I still think you're going to
see more people doing something crypto related.
And then the institutional the option, we talked a little bit
about it, right? Okay.
It's very slow. But of course, the I think the
flip side of that is also that it may take these institutions,
like a very long time. To decide to do something
crypto, then take some long time to like move, they move slowly,
but they're not going to just stop, right?
Taking a, I need you might slow down how much money they put in.
Yeah, there's also like I guess they have certain, you know, you
have a van that has that many millions that you kind of need
to deploy and then maybe they would continue that or they just
take so long that yeah, I guess it will be continuous.
Stream coming in, maybe not as big or that wasn't actually.
I saw some person treats. Unfortunately, don't remember
who that also can can can give credit here, but shout about.
Yeah, but basically, you know, kind of pointing that out.
I just like, how much money has been raised by, you know, like
crypto VC funds, equipped investment funds, like, be
deployed. And, of course, that's going a
lot into, you know, this private funding rounds and of course,
Seeing private funding answer. That, you know, huge valuations
like, raising lots and lots of money, you know, everyone's
raising money and I mean, that does mean, I guess that you're
going to have a lot of, you know, funds being deployed.
But at the same time was also sort of the point was okay, but
who's going to be like where does it demand come from
afterwards? Right?
Because, like, okay money goes in, they built something.
They go live. Now.
There's some token trading and like, who's buying that token
right for in the end of January to return for this mess.
This thing took the go up like, you know, ten times by covid-19.
So yeah. Yeah.
So I mean, I guess that reminds you little bit maybe after 2017
18 thing, right? Where there's also like a lot of
money going into these Ico projects and then, you know,
they may be came out, but then there was like, nobody there to
buy it. Yeah.
I think the question is just, yeah.
Where are you in? Are we in this cycle?
Right? I guess.
Is it already? It's always there still like
another wave coming. I do think it denied.
The nature of this Market is that it like creates exuberance
and it goes too far. So this reading and it is
newsletter from that Moorhead and you know, he was pointing
out where then use some sort of, I don't know what it is, like
some kind of, you know, moving average thing progressing, you
know, going to the Moon Over time and then seeing like where
we are compared to this, you know, inevitable labor.
Yeah. Yeah.
I don't like that.
Yeah, it's basically activating bow chart and you saying like,
Okay, if you look at that, but I feel like you know, 56%
underneath the you know, trend line.
So this is like cheapest cheapest ever kind of, right?
So I guess that's so definitely know the face of like crazy
exuberance, right? That's that's pretty clear.
I mean, I guess it in terms of like I guess there's there was
this vitalik post ones, right? Like crypto markets are at this
point. Have we earned it or something?
And it's very hard for me to like, kind of put into context,
how much of it is like actual value and or like, sustainable,
obviously, it's kind of not sustainable some things.
And yeah, where's the exuberance?
When is the point where it's gotten too far?
It doesn't feel like it right now.
I mean, maybe that's that's why it is the case.
I guess that's there's always the problem with these with
these things. But I mean, yeah, I mean, we'll
see. I don't have too much Alpha to
leak here today. Cool.
All right, then. Well, thanks so much for your
service fun. Enjoy this conversation and
thanks so much for. Yeah, thanks for having me.
Didn't expect to be on an epicenter that soon.
I didn't even build anything. No.
Yeah, it was it was great. And yeah, looking forward to
what's to come and Yeah, see you tomorrow at work.
Yeah, absolutely. And thanks so much for listeners
for tuning in and let us know what your thoughts are.
You can tweet at us at epicenter BTC and yeah, thanks so much.
We'll see you next week. Thank you for joining us on this
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