Bankless - BLAST: The L2 with Native Yield | Pacman

Episode Date: March 25, 2024

✨ DEBRIEF | Ryan & David unpacking the episode: https://www.bankless.com/debrief-pacman-blast-l2   ------ Pacman is one of the most interesting builders in crypto right now. After creating Blur, a disruptive NFT exchange, the crypto wonder kid is targeting the L2 space with his new yield bearing L2 called Blast. In this episode, we cover Pacman’s story, how he built Blur, how he pioneered Points and finally, we get into Blast, the already third largest L2 in TVL. ------ 📣 SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24  https://bankless.cc/spotify-premium  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠   🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo    🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku    🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 💸 CRYPTO TAX CALCULATOR | USE CODE BANK30 https://bankless.cc/CTC  🦄 UNISWAP | SWAP SMARTER https://bankless.cc/uniswap  ------ TIMESTAMPS 0:00 Intro 6:45 Pacman’s Story 24:40 Blast’s Perception 29:36 Blur 34:45 Points 47:55 Blast Genesis 54:35 Blast’s Native Yield 1:19:05 Yield Risks 1:23:15 Net Gas Revenue 1:26:00 Projects on Blast 1:30:12 Is Blast a Multisig? 1:32:51 Blast’s Vision 1:34:10 Blast on OP Superchain? 1:36:53 Closing Thoughts ------ RESOURCES Pacman https://twitter.com/PacmanBlur  Blast https://blast.io   Pacman Blur’s Episode https://www.youtube.com/watch?v=KBKRrKtGTY8  ------ Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures  

We want to build the L2 that provides the most value to developers and users. The most value of any L2, that's our goal. And we see the path to getting there is, you know, you have this L2 with native yield where everyone's just earning that by default, but also now you're enabling new types of applications. Robin Hood, for example, right, like them charging, you know, zero fees, that's actually providing more value to the market than if they charge no fees. So it's like these business model unlocks, it's not just like, oh, it's a new business

model. It's like, no, this is actually providing more value to the market. This is why these disruptive business models get adopted in the first place. So the only thing driving us is that we want to build the L2 that provides the most value to end users and developers. Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Pac-Man is one of the most interesting builders in crypto right now. He created Blur, which is an NFT exchange that came out of basically nowhere in 2022, and now has a

70% of the NFT market. And it almost seems like he's about to do the same thing with layer twos. He's got a project called Blast, which has blasted its way to number three in terms of total locked value of all layer twos. We get into the conversation with Pac-Man today. You do not want to miss this fascinating conversation with this crypto builder. Number one, we talk about who is Pac-Man? This crypto Wonder Kid. Where did he come from? What's he about? Why is he here? Number two, how he built Blur into the world's largest NFT exchange. Number three, points. Pac-Man actually created the points meta that we see today. What does he think of points now? Number four, blast the yield-bearing layer two. That's blasted its way to third-largest layer two. How did he do that? Is it secure? Is it safe? What about all of the criticism surrounding Pac-Man projects?

There's a lot to pull out from this episode, not just about the technical details around blast and what it actually means to be a yield-bearing layer two because I think a lot of people actually don't fully understand. the technical implications of what that means, and that's something that we pull apart here on the podcast with Pac-Man today. But just zooming all the way out about, like, yield as a concept, points as part of the meta, the movement of ETH and users onto layer twos,

and really how to be a builder in the space. Depending on who you are in this space, whether you are a user, you're a builder, or you're a VC investor, there's something in this episode for you, depending on how you look at it and what you want to get out of it. So we touch a little bit on

many different metas that are going around in the cryptosphere in the middle of this bull market. And I've learned quite a lot. I think I, like many other people, kind of discounted blast in the early days because of the spinal reflex that I think a lot of people had from its go-to-market strategy, which we also talked about with Pac-Band. But this was me coming up blast with fresh eyes and really appreciating the novel mechanisms that Blast rewired into an OP stack fork in order to make native yield-bearing a thing inside of the blast ecosystem. Yeah, he's got a way of implementing these clever shifts in mechanism design that have really used the term profound outcomes. We'll see bankless listener if you see one of those profound outcomes in the conversation today.

Of course, David and I will unpack all of this in the debrief, which is available to you if you are a bankless citizen on the Bankless Premium podcast, newly available on Spotify. All right, let's get right to the conversation with Pac-Man. But before we do, we don't thank the sponsors that made this episode possible, including our recommended crypto exchange for 2024. and the way to blast your fiat into crypto. That is Cracken. Go create an account.

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support for new and upcoming layer ones, layer twos, and all the airdrops that you're currently farming. 2024 is the year when the DGens do their crypto taxes with speed and confidence. Make taxes this year easy and affordable with crypto tax calculator. Sign up at cryptotaxcalculator. And get a 30% discount with code bank 30. Click the link in the show notes for more information. Bankless Nation, happy to introduce you to Pac-Man, the co-founder, Blur, creator of Blast. We had Pac-Man on the show a little over a year ago to talk about Blur and my how things have changed in just a year. Blast is now the number three layer two on Ethereum by TVL, despite just being a few days, maybe a week old, already has countless projects trumping at the bit to deploy on Blast and build inside of the brand-new blast ecosystem.

Pac-Man, welcome back to Bankless. Jim, Jim, thanks for having me. So, Pac-Man, you are two-for-two on project. that have completely redefined metas inside of the crypto industry. Blur really just changed the game in terms of NFT trading and the whole NFT marketplace ecosystem. Blast has now done the same again, because there is now a new focus on natively yield-bearing layer twos, which was a narrative, a theme, a construction completely novely introduced by Blast. Two-for-two on projects that redefine the industry is a pretty unique place to be. So just a little bit of just like, who is Pac-Man? How does he not miss?

Where did you come from? Who are you? Yeah, really appreciate the kind words. So just for like a brief overview, I got my start in Silicon Valley around nine years ago. I started off as a software engineer working at a company called T-spring. I actually had a bit of a typical journey. So I went to T-spring when I was in high school and I ended up dropping out to work there for a year out of high school after my sophomore year. Dropping out of high school? Yeah. We're not talking in college. You dropped out of high school. Okay. Yeah, I dropped out of high school. So I was 16 at the time. Yeah, it's fuzzy now. It's crazy how the time. implies, but 16 at the time, and then I went over to Silicon Valley, and I stayed, and I ended up actually starting a company right after T-spring, and we went through, it was called Strong Intro, we went through Y Combinator and winter 16 batch. I was the youngest, like, batchmate at the time, I was 17, went through that experience, and then I really wanted to go to college after, ended up going to MIT, and I studied math with computer science there for about two years where I met my co-founder,

Anthony, and we basically just immediately started hitting it off. We started building together. he graduated a year early. I ended up receiving the Teal Fellowship to go and drop out again after my sophomore year coincidentally. Serial drop her out. You just keep rugging schools, man. Yeah, I know, I know. You know, MIT actually has a really nice program where it's like you can drop out and just come back like even when you're 50. So I would like to go back at some point just, you know, to drop out a third time. Exactly, exactly. Maybe I can drop out of the MNG program. But I left and Anthony, we started our first business, which was name base. And that was a really niche company,

on a blockchain called Handshake. It was like a decentralized domain name blockchain. And we ran that for around three years and we sold it at the end of 2021 to Name Cheap. And then basically, immediately after that, Anthony and I, we started Blur, which is the NFT marketplace for pro traders. And we've been contributing to Blur for the past, you know, two, two and a half years now. And, you know, a few months ago released Blast, which is our new latest project. It's an L2 with native yield. And so that's kind of like the short summary of my professional history. When you were in high school, I'm curious Pacman, just so we can get insight into you and how your mind works. What gave you the conviction to drop out in your

sophomore year? Yeah, it was actually like super, super easy. So I had discovered Hacker News, which was like a very popular, it's kind of like Reddit, but for just like nerds. I discovered that when I was 13. And I basically just became super obsessed with Silicon Valley. Read all of Paul Graham's articles, was really into that. And my dream, like my number one goal was just starting company and going through by Combinator. Like that was like the only thing that I wanted to do. And I got really lucky when I was in a sophomore year of high school, I discovered T-spring, which was this custom t-shirt, like printing startup. And they were like doing incredibly well. Their founder had written a blog post on how they got to a million dollars in revenue in eight months, which was like crazy at

the time. And I became super fascinated with that. And I actually wanted to go and like build a competitor to T-spring in Boston. And I was like a high school student and I ended up coding up a competitor to T-spring. And then when I got around and finished a clone, I was like, way to second, like, there's a lot more to building a business than just making a website. So I ended up emailing the CEO and, you know, I shared what I had built and they hired me as an intern. And then after working as an intern, they were just growing like crazy at the time. So they really needed more hands. And everyone at T-Spring was like really, really professional, just like really exceptional quality in terms of builders. And I just felt like it was like a good

mentoring opportunity. So I asked them if I could work full time and they agreed. And the rest was was history from there. Do you advise this to any particular, you know, high school student that might be listening or is this just, you know, a road last travel that is only suitable for a few? Yeah, that's tough. You know, there's a lot of, there's a lot you miss from like not going to school. I'm actually like, I'm not anti-school. I actually really love school, especially college. I think it's like incredible. Yeah. I think high school too is like so formative for your like social and emotional development. So I'm actually like really bullish on school overall. I would say if you like really want it though, it's like it's not really something I can like advise. It's more.

So just like if you want it, you're going to do it. And I wouldn't like tell someone to do it or not to do it is really just a matter of like what they want. What did you want about this life? What attracted you to Silicon Valley to Paul Graham posts that you read and now later into crypto? Yeah, I think just the ability to build things that are really massive was something that was just incredible to me. You know, the idea that you could have, you know, the classic Silicon Valley stories, you have these like kids who are coding up a website in their dorm room and they go and build like the next big thing. That was just like so incredible to me. I was like, how is that even possible?

It seemed like a pipe dream. And the closer I got to it, the more I was like, oh my God, this is like real and you can actually do this. And it was just like, I was just like super addicted. I was like, I wanted it like more than anything. It just seemed fascinating to me and being able to actually like go into that world and, you know, live and work in Silicon Valley. I actually got to spend a lot of time.

And there was like early in the TEAL fellowship, which also like funded Metallic. They actually had this like house called Mission Control where they hosted a lot of the Teal Fellows. So I got to like hang out there and made a bunch of other, you know, like young kids who had dropped out to start things. And, you know, they actually had funny stories of, you know, Vitalik staying there in the early days and trying to, like, give people Ethereum as conversation for letting them crash on their couch. Really? And everyone was like, we don't want your Ethereum. Yeah. Nobody wanted the Ethereum. And then everyone regretted that afterwards, of course. But yeah, it was just, like, really

cool, you know, being in that IQ system, just surrounded by builders, you know, there's really nowhere else like it. I feel like it's a little bit different now, but, like, definitely in that time, like, 2014, like, that era was just, like, really incredible for Silicon Valley. What do you think about this life motivates you so hard? Is it like building towards something that's larger than yourself? Is it like to me the whole kind of Pac-Man ecosystem between Blur and Blast? There's a little bit of like world building going on there. What about this life is so like motivating and compelling for you? Yeah, I think it's just, it's like a very like visceral thing. I think building things is like really satisfying. And I think if you're going to build something, you should try to build the most significant thing you can build. You know, actually there is someone that I know, he works at like Open AI. And any, any system. something about like, you know, people basically could increase their ambition a lot, like, almost like across the board, if you talk to anyone, you could have them like 10x their ambition. And that's probably like still like beneath where their ambition should be in terms of like what they can actually accomplish. I think my perspective is just like, yeah, like I really enjoy building things.

And when I think that there's, you know, problems and opportunities, I want to go after it. And specifically, I really want to go after like the biggest problems and the biggest opportunities. I'm not particularly interested in like smaller things. I think it's like totally fine to go after that. It's just like, I think for me, I really just want to go after like the biggest things. And I just throw all my energy into it. So when you get a Teal Fellowship, do you get to meet Peter Teal? Or like, how does that work?

What's the selection process like? And just like, you know. Yeah, it's pretty basic. You do interviews, you chat with like the other fellows. If you've ever done like a YC application, it feels like very similar to that. Well, a little bit more process, but you know, very, very similar to that. You do get to meet Peter Teal. At least, you know, like I did.

It was a cool conversation. But, you know, he doesn't really spend a lot of time with the fellows. It's kind of more like, you know, he brands the kids and then gives him 100K and then, you know, he's just like doing his thing. So I only had one conversation with him. But I think the biggest benefit is actually just being able to hang out with the other fellows because they do a really good job of just kind of like curating a group of, you know, some of like the most like motivated people, you know, of that age bracket, you know, kind of like in the U.S., kind of in the world. So I think just that network alone is where most of the value is.

I was going to say that's like a good portion of the value for going to college, going to university too, is that sort of that selection effect. And I guess you sort of get that with a Tiel Fellowship then. think you do get a lot. I would say it's different, though. Like, MIT is the densest network of high caliber engineering talent that I've, you know, ever seen in my life. Like, when my peers there, they're like way, way smarter than me technically. And you just go there and you know every kid there can just, they can build anything. Like, there is really nothing that's like rocket science there. Like, not even rocket science is rocket science. Everything is learnable. You get access to, you know,

the people that, like, invented the technologies that we use today. I think going there is, it's something that's like unparalleled. The Tale Fellowship, you kind of get that more for like entrepreneurial people, but that's different than like engineering density. So I think they're both like very valuable for different reasons. Well, I know we want to focus a little bit on more than a little bit on this episode on blast and that whole ecosystem. But kind of like as I intro to you, I said Pac-Man is two for two on projects that have

redefined the industry. How surprised would we be, should we be if there was a third or do you already have ideas that you're thinking of? Let me just say I would be surprised. I would be surprised if there was a third. Yeah, I was surprised that there was a second, actually. That was never the starting intention. That one was more, like, very fortuitous. In some ways, I'm happy to kind of like share more about that. But yeah, I don't really go out and just like, I'm not like actively like, oh, I want to start like 20 different projects. It's just like, you know, blast was something that I felt needed to be built. And so I started working on that. I would be surprised if there was a third. But, you know, anything could happen. Pacman, we started this episode with calling you Pacman. And I got to think that's not your actual name. Can you tell? us at least your nation-state name, let's call it. Where did that name come from? Why do you call Pac-Man? Why do others call you Pac-Man? I think you started with Blur, you know, sort of pseudonymous, and now you're not. Can you tell us the story of how that happened as well? Yeah, totally.

Pac-Man is just my pseudonym. I'm Docs. My real name is Tieshan. That's Tieshan and Mandarin. And, you know, actually, adopting it initially, it was more so about like optionality than anything else. I had a conversation with a niche. He was at Paradigm at the time, but now I think he's on, like the founding team of ritual. And he was really deep into, you know, Ethereum. I was just like, hey, like, what do you think are the pros and cons of, you know, doxing versus not doxing? And he was saying how, you know, he actually, in retrospect, probably would have started like Anon if he could. And he said, you know, at minimum, you always have the optionality to docs. And, you know, it was like a free option just sounded great to me. So I decided to go with Pac-Man as a nickname. And yeah, it's just suck.

One of the nice things about it that I didn't realize at the time was having a name that people know how to pronounce is actually, like, a huge advantage. Normally when I introduce myself, like, with my real name, it's like, you know, they're spending five minutes just trying to figure out how to pronounce the name. Just be able to say, hey, I'm Pac-Man, and then that's the end of the conversation. It's actually extremely nice. I never really realized that benefit before. Yeah, and, like, was it your choice to become sort of quote-unquote doxed, or how did that happen? Yeah, it was, you know, my intention from the beginning was basically two docs. We never really went hard on the like anon you know mentality like if you were to actually try to be anon like it takes

a lot of work you have to be like really really thorough and it's like yeah you have to be very very thorough it's almost always going to get out eventually like even the anons in the space like you know a lot of people know who they actually are you know behind the scenes so for us it was and for me specifically it was never something that i intended to do forever it just felt like a convenient thing to do at the time and then i think i docked after the blur governance launched along with the token and, you know, it just felt like it was getting enough attention at the time that I might as well, you know, going kind of to share with the world who I was then. So that was where it came from. But it was always intended. So you self-doxed? Yep, self-docks. You did it yourself before somebody else did it to you. Yeah, exactly. I like to be able to do it, you know, like, on my own terms. Just like, if I'm going to dox, I might as well do it myself. Now, has that changed anything for you? Like, in a post-doxed world? Is it easier? Is it better? Or it's just you really haven't noticed anything? Um, you know, actually one time I got recognized in San Francisco, which was kind of, like, scary to me. I was like, never really expected that. So, you know, besides that, I don't think it really has made that much of an impact. I would say, like, there are a lot of benefits to being pseudo.

It's cool just being able to, like, navigate the world without people knowing, you know, and just being able to, I think it's really just like an optionality thing. Like, having the optionality to, you know, divulge that information with someone that you trust, like, when you want. That's, like, really cool versus, like, when your docs, just like everyone already knows by default. And I think in many ways it's like you can get more authentic interactions with people if they don't know your background versus when they know your background.

It's just like by necessity, that's just going to change how they think about the situation. So I think there's actually like a lot of benefits to being, you know, Anon or pseudo. But, you know, like the docs is like the default state for like almost every, you know, builder in the world like ever. So it's like not that bad. I wonder how much of this too becomes like sort of a persona that you wear, almost like, you know, Peter Parker has Spider-Man, right? He's got a superhero outfit and a superhero name and is sort of a different person of Spider-Man versus, you know, Peter Parker. I don't know if this has become that way for you, Pac-Man, but Pac-Man definitely has a name in the crypto industry, I would say, and sort of a narrative associated with us. David kept mentioning

we're going to get to these projects. Like, Blur has been an incredibly successful project. Blass has been an incredibly successful project. You as kind of like a young Wonder Kid kind of like founder building these things and seeing the vision for them, making them so successful. I'm curious what you think the perception of Pac-Man is, kind of like the narrative. How do you think the industry sees you? Yeah, that's an interesting question. I think it really depends on who you ask. I think if you ask, you know, crypto natives who are like on chain. I think that they would think of me favorably. Maybe they've even used blur. Maybe they've used blast. I think they, you know, would probably enjoy that as users. I think if you talk to, you know, different crowds, maybe they think I'm like reckless or something,

you know, based on what was built. So I think it really depends. Are you reckless? I would say no. Although I think there's definitely a perception of that. I wouldn't be surprised if there is a perception of that. But in general, I actually don't like taking risk, which might seem weird. Where do you think the perception comes from so far? I think it's just like optics. I think I would have to share like, like, let's say out like specific names. I might be able to like try to like put my head in their like mindset and then I think about from that perspective. But I think just like optically is like really easy to like fud ultimately. And what I've noticed is like a lot of fud really comes from like optics more than like fundamentals. So I think that's really what

it comes down to. Usually when you get into the fundamentals, you're going to find a different story than what you see just like on the surface level on like crypto Twitter. And that's not just for me, but you know, something across the board that I've observed is that when you talk to people who are like really deep into an ecosystem, they usually have a very different perspective than when you talk to people who just kind of understand things at a surface level or maybe like don't understand like the technical underpinnings of a thing. And so there's kind of like different levels of narratives based on like how deep you go. So I think like on the surface level, that's probably where it comes from. On a surface level, what do you think, just to put an archetype on it, like the classic

eth-maxi, decentralization maxi, what do you think their perception is of the Pac-Man ecosystem is? Yeah, I think it really depends because for some of them, like, some people would like really, really get it. And I think that they would be like very positive. And I think other people would be negative. I think if there are like specific perspectives that you share, then I think I could give my perspective on it. But what I typically do is I really just care about the end users at the end of the day. And I like to think from first principles is like, okay, like, what are we doing and how are we doing it? How do I feel about how are we doing it? Can I analyze how we're doing it and evaluate it against, you know, certain criteria that I think are important? And then from there,

that's basically underpinning everything that, you know, I and the team is going to do. And then I pretty much ignore everything else other than, you know, like the user perspective. So I would say I don't really have as a clear of a perspective on like, you know, oppositional framings. But, you know, If you share specific ones, I could definitely talk about it. Sure. Yeah. One of my interest in this episode is really unpacking the technical properties of what it means to have a layer two with native yield.

And maybe that's kind of what you're referring to as more of the fundamentals. This is me sharing a perspective. I think people's like reflex when they saw the launch of blast was they saw a founder who was very successful, gamifying the launch of blur with different strategies for getting the token like season one. You would do this activity to get this many points. I think correct me if I'm wrong, but Blur was one of the first things to do points to begin with or just to like have seasons around like how to get the future token really like kind of like crescendoing

and corraling a community to do something that the protocol want. And this more or less spawned the points meta. And I think when people saw the launch of blast, they saw a founder who had experience doing this and really just like turned that dial up to 11 with a launch of blast with relatively like aggressive marketing of points, marketing of yield, blasting the native layer two, and then launching the system before it was even a layer two. So like launching a layer two, that was actually a multi-sig with aggressive incentive marketing with both points and yield. I think this was like people's spine reflex. And to this day, like for people that still haven't like looked into blast, that's probably still their perception of what blast is. And so hyper-financialization, hyper-incentives,

aggressive marketing is like a decent cohort of people's perception of what blast is. Like, how would you, how would you respond to that? Yeah, I would think that for a cohort of like the crypto population, that definitely resonates with what I've seen. Yeah, you know, actually, some of that's very interesting about the points meta is as far as I'm aware, on the blur side, we were the first, you know, team product protocol to ever do that. What was really surprising to me was that I thought that that was going to get copied like very, very quickly. Like, I thought it was like very clear to me that this would be, you know, the new distribution model. I thought everyone was going to to do it. And actually, it wasn't really until 15 months later when Blass was released that I think

then I started seeing a lot of points starting to proliferate. And it's like weird. It's like 15 months is like a really long time. Right. And I think it was just like maybe like the market just kind of need to see like the track record of, you know, like you're saying like the two for two. And then they're like, okay, maybe there's something here and then they started copying. But it was very surprising to me that, you know, other builders like didn't really pick up on it sooner. I guess maybe it's like there's a lot more copy trading. Frentecke. Frentec was definitely a very big leveraging of points was like the only ecosystem that I remember that came before blast that really leveraged points. And if I remember correctly, they also credited the whole blur

campaign as like one of their big prime motivations. Also paradigm shared investor in both blur and Frentec. And so maybe they were like, hey, points work. You guys should do points. Yeah. Yeah, definitely. I think they came out like in the summer. So it would have been like maybe like 12, 13 months post the first blur campaign, which was in May of 2022. So it was May of 2020. And I think Front Tech was like August of 2023. And then Blast was November of 2023. And then yeah, I guess from that perspective, actually there was like three like good data points. And then we started seeing a lot of it.

I was just saying in terms of like, you know, that perspective that you shared, like the aggressive like hyperfinancialization. You know, in terms of like response to that, yeah, it's like, it's an interesting perspective. You know, what's interesting is like in terms of like how things are developed, that's like never the perspective. Like that's never something that's like considers like, oh, how can me like, how can be like, hyper financialized things. That's like never, never actually the root of it. And even like the incentives, the incentives are always an afterthought, actually. The thing that's the starting point for everything is just really just, you know, where do we see gaps in the market? Where do we see problems that aren't being addressed? And then how do we provide more value to the end user?

And, you know, this is a financialized market. So more value typically is very correlated with, you know, is a user making more, you know, in this system than an alternative system or the status quo. And those are the first principles in which we're basically addressing these problems. And then from there, we'll design things where you think, okay, this is actually going to provide more value to the end user. And then, you know, from there, we can design like a launch, right? And we can design like a campaign. But that's always like the base of it. So I think that those like reactions, it's like really interesting. I think those are reacting to like the surface level like outputs. But it's actually the inputs that are actually driving everything.

And I think the inputs are actually way more interesting here when you look at it. So happy to talk about that, but I know you were going to switch topics. No, that's actually exactly where I want to go. I want to go into just like what is the secret sauce inside of the blast system. But before we get there, I kind of want to just like speed run through the arc of time that got Pac-Man to blast. So we just got for the listeners who didn't listen to our first episode, Pac-Man, all about Blur. Let's see if we can just like speed run through the history of blur. We had to be on the show in February 2023 to talk all about it. So like speed run through your thought process to like wide launch blur. And And then what were some of the big lessons that you learned during Blur that carried forward into Blass?

And then we'll formally unpack the Blass conversation. Yeah. So Blur started off, started building it in January of 2022. The impetus for Blur was actually in my own experience as a user. So I really fell in love with NFT trading in 2021. Minted up BlipMap as my first NFT. From the Loo ecosystem? Yes.

Yes. It was actually a warm emoji. I don't know if you were familiar with him, but he's in the NFT ecosystem. And he was working with Dom Hoffman. at the time. They worked on the TikTok competitor that was later, like, other sold or shut down. But, you know, from that, they started LipMap and he was in one of my group chats. He was like, hey, I created this project. And I think you guys should check it out. And I was like, you know, why not just like throw a few hundred bucks at the time, you know, to the

NFT and I bought one. And then the entire like NFT bull run happened. And I ended up selling around like 2530th. And I was just like super hooked. Afterwards, I was like, what is this crazy ecosystem? And I started getting really into trading NFTs. Like I was writing, you know, I was like doing some scripting, doing some, like, you know, data analytics and just like really getting into the ecosystem. I just really fell in love with the entire NFD ecosystem myself personally. And then as I was using the different infrastructures, I realized that everything was just, like, really, really inefficient.

Like I as a user was, you know, feeling a lot of pain, just like a lot of repetitive clicking, a lot of like slow, low times. And then it's just like very frustrating. I think there's like a lot of studies on this where it's like any sort of like perceived like lag by users is like really like painful. It's like infuriating for people. And I just felt that myself, right? So I was like, okay, there has to be a better way here.

And that was an impetus for Blur. So then we started building Blur in January of 2022. We ended up launching in October of 2022. And basically within three months, we went from like 0% market share to greater than 50% market share. And then now we set around like 70% market share. And that was like the trajectory of it. So we released Blend at some point. I think it was in May or June of 2023.

And Blend was a blending process. protocol, the first peer-to-peer Oracle-free lending protocol for NFTs. And we integrated that, and that basically became immediately the number one, like, literally within one day, the number one NFT landing protocol on Ethereum. And since then, we just continued building and contributing to Blur. How'd you do it when you kind of look back at this period of history, when we go from 0% to like 70% of market share? I mean, obviously competitors weren't sleeping either.

I mean, they were continuing to build. And there were some that thought the most around things like platforms like open were pretty hard to get over, pretty impenetrable. So what do you count to the success of Blur? Why do you think it did so well and is doing so well? Yeah, when you looked at the landscape at the time, there were a lot of NFT marketplaces. I actually remember looking into them early on,

like before, sorry and Blur, just because I was curious as a user. And I kind of like, there was like a spreadsheet early on, but like 40 different NFT marketplaces. Coinbase, of course, famously, they spent like millions and millions. I think it was maybe like hundreds of millions, like launching there.

an IT marketplace, which is like a total flop. Of course, there is OpenC, there is looks rare, there's X2 Y2, there's so, so many attempts. I think the reason why there was an opportunity was just because, you know, even though there were so many attempts, no one was actually really building, I think, for the end user that kind of like fit my profile, which was like, I really loved trading NFTs specifically. So there is a lot of people kind of focusing on the retail aspect of things, but they weren't focusing on the trader aspect of things. And the vast majority of activity was coming from the trader side of things. So even though it was like very like competitive, no one was actually building for the traders. And we were really the first to build

for the traders. And it's non-trivial to build like a really fast, real time platform. So I was really fortunate that, you know, my co-founder and I, we recruited a bunch of our friends from MIT. They worked at, you know, trading firms like, you know, like Citadel and I know, like other firms where, you know, just building like really high speed, low latency. Infra is like, you know, very important there. And it's non-trivial. for sure. So it was a combination of like being the users ourselves and also just kind of being fortunate and that our skill set was very aligned with what the market needed. So Blur has obviously been very successful and so has the concept of points, which I think we've basically given you

credit for. And I think the well-deserved Pac-Man of sort of creating that meta in crypto and launching the current points craze that we're in right now. Can you talk about the genesis of points in Blur? Was this like a very obvious concept to you? Or like how did this come to be and why did you do it? Yeah, Blur was very interesting because, well, obviously, it's like a protocol, not just like a startup. But if you think of it like a startup, it's like very interesting because normally the startup journey is like, oh, you're supposed to like launch things quickly, iterate a bunch and actually you're going to like pivot a ton, you know, along the way because your like thesis is going to be wrong. You're going to have to like update. Maybe you go into a home market, you know, et cetera, et cetera. Blur was totally different.

Blur was basically like before even starting on it, the entire like roadmap and what was going to be built and how it was going to be built was pretty much planned out. We knew that we wanted to do a point system. We knew that we wanted to do an NFT marketplace for pro traders, make it like a real-time, you know, Bloomberg terminal-esque experience. And that was, you know, all conceptualized, you know, prior to launch. I think the motivation behind it is, you know, our perspective is it's not from a perspective of like growth. It's not like marketing. I think if you're thinking from a perspective of marketing, you're probably thinking about it wrong. It's more so about how do we align incentives with the users.

what we wanted to do was we wanted to basically create this system where it's like as a user, if you're contributing to the growth of this protocol, then you're going to be rewarded. And the same way that if you think about like Bitcoin, it's like as a Bitcoin user, Bitcoin actually aligns incentives like so perfectly, right? It's like as a user, you can hold it and you can chill it, right? And that's actually supporting the growth of the ecosystem as a miner. You can, you know, go and build out mining capacity and that increases security of the network, which is actually allows, you know, more users to come in and you're rewarded that way.

So Bitcoin actually like almost perfectly aligns incentives. And it's no wonder that it's, you know, grown to be as big as it has been. And I think there's like the OG like incentive alignment. That's just like so beautiful to study. When we think through like, okay, we want to, you know, build this protocol. And, you know, in our view, there's a way to actually build a protocol where the entire market is benefiting from it. Well, how do we create a system that is basically kind of tracking people's contributions,

you know, to that system? And so that's where the points came about. So it's funny because I think that a lot of people would probably like not people who are like users, but people who are like kind of like outsiders, like watching in, they might kind of think of points as this like, you know, just like cheap gimmick in a way. But again, like that's just like an output from someone that's like not a user. And the entire point of points is that it's actually incentive alignment with the user base. And so basically we wanted to encapsulate and be able to measure people's contribution.

And then our perspective is like, okay, from there, then they get to end up basically controlling that network that they're contributing to. And the similar way to, you know, again, like with. Bitcoin, it's like if you build a minor, if you're a holder and you actually, you know, on board more people, you're actually, you know, being rewarded for that and implicitly. You know, that's the motivation for everything. So it's not about marketing. It's about incentive alignment. How's that different than marketing?

So in your mind is marketing a bit more kind of like top down, the startup, the protocol, kind of like pushes that out to the masses, whereas, you know, something with aligning incentives makes each individual user a marketer? Why is this not marketing? I think of marketing. You can consider it. Like, I think it's fair to say, like, the output is kind of doing the job of what marketing would do. Okay.

I think, like, that would be a fair. Marketing is a byproduct. Right. Marketing is a byproduct. So the input is incentive alignment. One of the outputs, you could say, is marketing. I think that would be very fair. When I think of marketing, I think of more.

So it's kind of like more of a, almost like a selfish orientation. It's like, oh, how do we like, you know, sell this product to users or how do we, like, get this into the hands of people? It's really from the perspective of, like, what's good for, like, a specific organization or whoever's like doing the marketing and like that's fine right that's a separate thing and it's like very valuable actually right like you need to invest in like marketing like that's definitely a thing that matters but you know for the point specifically that's not the goal it's not the input that's leading to the design it is like an output though i think that's super fair what do you think of where points have

evolved up to this point where there are so many crypto projects now that have implemented points are you sort of proud about your contribution here do you think they're doing the right way do you think this is a better state than the world of crypto 12 months ago, which basically had no points apart from the Blur project. It's interesting. What I've seen a lot of is something akin to what I would say, like copy trading, where it seems like there's a lot of teams, you know, implement these points, probably from the perspective of like marketing and then being like this is like a good growth mechanism. And it doesn't actually seem like there's a lot of like in-depth understanding from first principles. And I think that when you're not approaching it from first principles, then the output is going to be like really,

really different. You know, something that I see a lot of is, you know, kind of akin to, like, farming the farmers where they almost seem like predatory programs that's just extracting value from the user base in a, like, very gamified way. And I think that's fairly suboptimal. And a similar way to, like, you know, I think Bitcoin, like align incentives and created something really incredible. But that doesn't mean that like every crypto project that ever, that spawned since Bitcoin has been like a net positive to users, right? I think a lot of them have been fairly large net negatives that doesn't detract from what Bitcoin has on. I just think it's, know, some projects are kind of taking learnings from Bitcoin and implementing things, again, from

first principles to create net value for the world. Other projects seem to kind of just maybe copy it for, you know, their own reasons. And I think that ultimately it's the ones that are, you know, really thinking about it from first principles that are making contribution. The other ones just kind of, yeah, just like copy trading. It's not necessarily beneficial. Go into that more. Where do current point systems go wrong, do you think? What does it mean to farm the farmers? What did you mean by that? Yeah, you know, something that I see a lot of is there's two things. Sometimes they're like very undefined timelines. That one, I think, is like really, really hard, but it's not just undefined timelines. It's undefined timelines plus basically what the incentives are doing is that

it's incentivizing people to transfer money from like their wallet to the team or the protocols wallet. And so basically like what that is doing is it means the the teams are being rewarded in the short term and the users who are, you know, hopefully rewarded in the long term. But there's a almost this like incentive misalignment where it's like the teams actually have like a short time horizon in which they're benefiting. The users have a long time horizon in which are benefiting. And actually in the short time horizon, the users are losing out because they're like literally spending money and, you know, the end of their wallet drained over time. And that incentive misalignment, I think is actually like really, really suboptimal. So, you know, I think if you look at like specific projects and you

kind of like think about it from this perspective, you can see, you know, these like incentive misalignments coming out. Really what you want is you want, you know, all of the contributors, whether it's like the team, investors, like random users. core users like everyone ideally is incentive aligned on a similar time horizon. That is like the best thing. But if someone's like benefiting in the short term and others are benefiting the long term, that's misaligned. This just reminds me of just the same pattern that we've seen throughout crypto throughout all of the cycles where the ICO movement started with some of the best projects that we know of the major one being Ethereum itself. And then as time went on, the ICOs increased in their misalignment between token issuers and eth receivers. And surely that principal agent problem. That is, I think, more or less what you're talking about, where teams benefit in the short term, users might benefit in the long term. But as time goes on, that becomes even more dubious and almost assured that the users end up getting kind of like exploited just because of that incentive mismatch. And this is something that I kind of see happening

with the points meta. People are using points very effectively to get what they want done. And I'm worried as time goes on that appropriate leveraging turns into user exploitation as kind of this meta spirals out of control. Pac-Man, just what advice would you have for users who are interested in points who also don't want to lose, lose out on their stack, lose out on their web, like, what advice do you have for users who are playing in the points game? How should they think about this whole thing? Yeah, I think the best way to think about it. And, you know, this is tough because it's like, it requires, like, effort and like thoughtful analysis, which takes time. And especially in this market where it's like a bull market and

you have crazy opportunities, you know, popping up and you kind of have to, like, act fast. I think it's like really, really tough, right? It's like every single bull market is similar. Same thing with the ICOs, right? It's just like, oh, if you've heard it's been in the theorem, ICO, it's like you were made through that. It was like one of the best like wealth creation events, you know, in history, especially for like the general public. But then a lot of the ICOs after that were obviously just like taking funds from users and you didn't want to like miss out on the next thing. So I think it's like really, really tough. I think that, you know, to the extent that a user can try to understand the system and get a sense of, okay, is the team that

implementing the system, are they actually incentive aligned with us as users on the same time horizon? If basically if everyone's on the same boat, then I think that's probably a good heuristic. If the users are in one boat and other people are in a different boat, whether it's like the team or investors or other counterparties in the system, if they're on like a different boat and you're not on that boat, then you're probably on the wrong boat at the end of the day. Maybe it still works out, but I think it's much more dangerous. So I think thinking about it from that perspective would be helpful. Okay. Let's finally get into Blast, the subject matter of the episode. All of that, I think, was five or six or seven different ways to enter into the blast conversation. And now we're finally here. But really starting at the very, very beginnings, where did the idea for Blast come from in the first place? Because you already had Blur. Blur is already a project that, like, you could spend your whole entire life building that whole kingdom. But Blass is also an entirely brand new, very ambitious project. Where did the idea for Blast come from? Why does the world need Blast? Why do you need to build Blast?

Again, with Blast, the intention was never to start up another project. Like, contributing to one is enough effort. You know, doing two simultaneously is like extremely exhausting. But Blast came about for a number of reasons. You know, one of them was actually informed by my experience contributing to Blur. So at a certain point, we started looking at, you know, layer twos, right? Like, I think layer two is in general is like pretty obvious. They're the future.

You know, someone having to spend like $50 in gas on an NFT on L1, that just really prices out a ton of use cases and possibilities of what, you know, NFTs, you know, which is like, you know, non-fundible digital assets can be. So we were really digging into the various L2s. I was fortunate to be able to talk with, you know, pretty much like every team, you know, like the founders of the various L2s, you know, had, you know, my co-founder digging into them as well from a technical perspective. And the thing that really stood out to me after doing that investigation was, and this is from the perspective of a builder, right, because there's different perspectives that you have to consider here. But from the perspective of a builder,

you know, behind one of the largest, you know, L1 apps, right? If you go to and look at like the gas consumers, you know, blur is consistently one of the top ones. So from the perspective of builder from one of those apps, I didn't find any L2 particularly compelling. They seemed to all offer pretty much the same thing. And it was really confusing to me because I was like, okay, you know, actually my perception of L2s as a bystander, right? This is a bystander, right? this is like as an outsider, again, and the outsider perspective is usually the perspective that you can kind of discount the most. At least she's like, wait at the least.

But as an outsider, initially, I was like, oh, these L2s are like super differentiated. Like, you know, this one has this feature and this one has this feature. And they all talk about different things. And, you know, they're all kind of have their stake in different aspects of the market. So that was like my perspective. And then once I actually dug into it, I was like, wait, actually, like, as a builder, I don't really find any of these, like particularly compelling. That was one.

another one was, you know, on the blur side, you know, a problem that we experienced was that the blur pool had around like $100 million in it, you know, since like February, basically, of 20, 23. And that ETH was just sitting there, not earning any yield. And we realized really out, we're like, wait, this is like a ton of ETH in the pool. If yields could be earned from this, it could be really utilized in a helpful way, right? It could find further contributions. They could go back to the users. Like, those would be great things. But when we dug into it from a technical perspective, it was not really feasible to go ahead and take advantage of the yield just due to the transactions and the gas and just like the mechanics of like what needed to be done. So we had this,

you know, pool with like a ton of ETH and there was value that could have been unlocked from it. And we're just like we're never able to tap into it. And then basically, you know, those were kind of like two underlying principles, you know, blast came about from identifying, you know, after digging into the L2 market, realizing that, you know, there's this large gap that wasn't filled in that none of these L2s were offering yield to the users. And, you know, if we think about yield, it's a really important concept because ultimately, you know, there's two high-level principles that you kind of hold to be true. One is that, you know, markets will march towards efficiency, and two is that liquidity will flow to where it can get the highest yield. And if you think about the

different types of yield, there's a lot of history that you can study. You know, one example of yield, of course, is the quote-unquote risk-free rate that the Fed controls, right? Raising this or lowering this by even like a few bips actually has like drastic impacts on the economy. And it's how they actually, you know, control and influence inflation. And just with, you know, a few percentage points, they're able to actually like drastically have, you know, significant impacts on the economy. And if you look on chain, there now exists on Ethereum, you know, a similar, you know, low risk yield in the form of each staking. And so Ethereum as an L1 had this yield, right? It's right, around three to four percent. And that alone sucked up around, you know, like $20 billion of liquidity into

the various like liquid-saking protocols. Now it's probably more, haven't checked recently. But that was the case on the L-1s. But on the L-2s, all of them had a baseline interest rate of about 0%. And when I realized that that really stood out to me. I was like, wait, like the interest rate is 0% on L2s when it's actually, you know, around 3 to 4% on L-1s. And so the realization was that we could actually basically have a 0-1 moment. We could raise interest rate from 0% to around 3% to around 3 to 4% by implementing native yield into the L2. There's a big question initially on whether that was even possible. We had to make really significant changes as well as just like coming up with like fairly

novel mechanisms to actually make that native yield possible. That was like step one. But once we identified that that was possible, we're like, okay, this is clearly the future. This actually enables a lot of really interesting things. One is obviously for the users. Now they're just, you know, earning more by default. So like blast users as a whole are earning around 130 million in annual yield just by keeping

their, you know, eth and stables on blast. But actually from a developer's perspective, it actually enables you to build new kinds of DAPs and specifically new business models that aren't really possible anywhere else. And once we realize this, we're like, okay, this is clearly going to be, you know, like where the future lies. And that's where we, you know, threw the energy into. So again, it wasn't like a premeditated thing. We didn't like plan on going out and, you know, my co-founder, we didn't plan on starting up an L2. We weren't like, oh, the L2 market is like a big market and we want to get into it that. That was not at all the intention. Really, it was us as builders in this case, looking at L2s, basically realizing that

none of them were particularly interesting for us as builders. And then from there, realizing, oh, like, this is the shape of something that actually would be really interesting and valuable to us. All right. So arbitram, optimism, polygon, they're all going after like EVM, Ethereum equivalents. And you were looking around the layer two landscape and saying, well, there's not a lot of differentiation here. And then noticing just the massive opportunity there is and just like putting dormant assets to work inside of a layer two, hence Blass being the natively yield-bearing layer two. I'll have to admit that I actually totally mid-curved to this when I heard about Blass in the first place where, and maybe you can actually answer this question, I always thought that like my first impression

of Blass was like, why does it need to be a natively yield-bearing when I could just use Lido-staked Eth inside of Ave on optimism, right? And now I'm getting yield and I'm on optimism. And so like, why does the layer two need to be native yield-bearing instead of you could just use a staked ETH token, send that over to your layer two, and now you're just getting that yield that you would be passing along to your users on blast, but now you're just doing it in all the other layer twos. Tell me why I'm mid-curve on this. Yeah, that's a great, great perspective. Like, that reaction is like, I think that's, like, a reasonably smart person, like, default reaction. So, like, totally makes sense that, like, that's, like, the default reaction. In terms of why

it's important is because fundamentally, when you think about the on-chain economy, and specifically within the Ethereum ecosystem, there's a base unit of currency that people use for transacting, and that's ETH. And all of this infrastructure is actually built around spending ETH as this transaction primitive. When you look at L2s, it's similar, right? Like everyone's spending ETH as a transaction primitive. And actually, that as like the default transaction primitive has, like that default really

matters because all of the infrastructure, all of the users, they're all oriented around spending ETH. When you have a EARC 20 instead, there's a number of differences there. One is there's just like baseline, just like programming differences in terms of like, you know, you need to approve the spend on an ERC 20. It's less gas efficient. There's a number of like UI, Ux differences between spending ETH and spending an ERC 20. And then again, there's a lot of default infrastructure that's built around ETH that you have to basically change to build around like an ERC 20. And there's just like a lot of path dependency, basically. Where because of that path dependency, using a ERC 20 is actually like really suboffimal because you're not going to get adoption within the system, both from like the DAP side. the infra side and then also just from the user side, because users are very oriented towards spending ETH. So the ETH itself, and again, like, it's not just that it's like a default, but actually, you know, what you can build when you have ETH that you can spend that's earning yield versus like an ERC20. Those are different things. Okay. So maybe we can just like kind of set the table here.

The reason why wrapped ETH exists on the Ethereum layer one at all is because ETH is not an ERC20 token natively on the Ethereum layer one. ETH is ETH. All the other EARC20 tokens are ETH. ERC20 tokens, but ETH is ETH. And so there's this mismatch there that creates the need to have wrapped ETH, which is the ERC20 version of Ethereum that can be like used, it's used in AVE, it's used on OpenC, it's used in Blur, just to make it compatible with all the other ERC 20 tokens. And so what you're saying is that like if we denominate our layer two, technically at the technical level, at the deepest level, in an ERC20 token, that can open up some defy UX new surface area, new improvements and simultaneously it also allows us to have native yield as the unit of account,

the denomination of the Blast layer two. Is that what you're saying? That's along the lines, but I want to make it clear. It's not an ERC20 that is like the native unit of account on blast. It's ETH itself. And there were significant changes that we had to make to make the ETH itself natively yield. And that's actually what we mean when we say native yield. What's really funny is that post-launch, we've seen like a lot of competitors actually kind of like copy that wording and they say like they'll basically deploy like steath on their chain and they'll be like we now have like native yield and it's like really funny when we see that because it's like okay they're copying the marketing like they're copying the output but they're not actually copying the input which is like what is the thing

that's native yield bearing it's the eth itself i think a good way to like get intuition on this is imagine if like ethereum as an l1 suddenly made all of the eth yield bearing right so you're not converting your eth it's not that everyone's converting their eth into steith it's that you know your Heath itself in your wallet is now natively yield bearing. You know, the effect of that would be so profound, like the second order effects of that would be so profound. It's very, very different than just Steeth on its own existing because Seeth already exists on Ethereum, right?

But if you imagine a scenario where ETH itself was the thing that was yield bearing, you would have a very different output from like a system perspective. Now, ETH, you know, can't really do that. Well, maybe at like the technical level with like certain upgrades. Like maybe that would be possible. I think that, you know, that's not really something that we've really considered. Like, you know, ETH from a practical perspective is not going to do that. But an L2 actually can do that.

An L2 can basically create an environment where it was as if Ethereum itself had ETH be the yield-bearing asset. And again, the second-order effects of that are quite divergent than what you have on an L-1 today, which is you have Eith and Steve. Are you launching a token? Is it already live? How are you managing the legal and tax obligations for providing token grants to your team? It's no secret that token management gets complicated.

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And of course, Ethereum will never do this for partially maybe some of the same reasons that the U.S. would never do this. But it's almost like a U.S. economy runs on the dollar, basically. And what if there was a U.S. government treasury update, which basically made all dollars into treasuries or something? And you got like the dollar plus your, you know, 5% yield or whatever the current Fed fund rate is. That's essentially what you're doing inside of Blast.

but you're making that the unit of account, the medium of exchange for everything there as you're just providing the yield. So how does that work as a user than Pac-Man? So basically, if I move some ether over to L2, does it instantly become yield-bearing? And how about my stable coins, too, because you're not just limiting this to eth, right? Also, if I move my USDC or my dye or something like this, it magically becomes yield-bearing. Can you talk about the mechanics for someone who hasn't used blast before? Yeah, totally.

And before I dig into that, I think that your example was really great for developing intuition on this, right? It's like, oh, like, for US dollars, like, yeah, we do have options where you can deposit your US dollars into a yield-bearing account. But intuitively, you can understand that if everyone's US dollars, right, the dollars that you're spending from your credit card, the dollars that are in your bank, you know, the dollar you're wiring, if every single dollar that people were using was actually yield-bearing, that would have very different effects on the system. And I think that's a great way of, like, developing intuition about it. And it's like a very subtle thing, right? So it's like, it's not like a media obvious, but it's a subtle thing. thing, but it has a profound impact. And in terms of, you know, what the user experience is, so this is actually the hardest thing. When you bridge your eth over to Blass, basically you'll

have, like, let's say you're using Metamask, right, you bridge one-Eth from Mainet to Blass. You switch over to the Blass network, you're going to see one-eath in your Metamask wallet. The difference is that in a year, that one-eath is going to become, you know, 1.04-Eth automatically, right? And then next year it would be 1.08, next year will be, you know, 1.12, et cetera, et cetera. So as a user, you don't actually have to do anything to opt into this. It's just automatically how happening and your balance is actually like automatically accruing. And the challenge that we had was actually making sure that we could implement this system while maintaining EVM compatibility. That was super hard. We basically had to modify, you know, low level details about how the EVM works, including

the underlying storage layout for every account, for every wallet, in order to make this possible. So it's pretty significant engineering that went to it. But the output is actually like really simple. And I think that's actually why it's really easy to like dismiss it because the output it's just like, oh, I deposit my eth over to Blass, and now I just have, you know, the same amount of eth in my wallet. Optically from a user, from a UIUX perspective, is actually the same. And a lot of work had to go into making that experience the same. So that's like the technical moat around Blass is like you guys have done like the hard,

low level engineering to make this thing technically feasible without breaking compatibility with the EVM ecosystem. You keep saying this word profound about like what this unlocks and all of the downstream consequences of that. Like spark our imagination here. Like what about this is so profound? Yeah, I think there's a few different aspects of it. And frankly, I actually think that, like, even my understanding, because it's like, it's very hard, I think through like second, third

level effects. So like even my understanding is going to be probably like limited in terms like what actually ends up happening and the differences that end up happening. But, you know, just like at a surface level, if you think from like daps, right, like you think about every single, like successful DAP category, once you have this native yield as a primitive, when you think about like the unlocks, you actually are able to unlock new business models that aren't really possible. otherwise. So I think a great example is if you look at like perpdexes, perpdxes, they typically will go ahead and monetize off of trading fees, right? So that's like very standard. But they actually have a lot of TVL. You know, like, DydX will have like a few hundred million in TVL. GMX is a few

hundred million. You know, they regularly have around, you know, like a few hundred million TVL. And what you could do with this native yield is that you can actually have a perp tax that monetizes off the yield instead of trading fees, you know, very, very easily. And now, again, it's like it seems very simple, but it's basically like a disruptive business model approach where you can kind of be like Robin Hood with all the brokerages, right? Robin Hood came out and they charge everyone, you know, zero trading fees. And, you know, they coupled with like a nice mobile app, but it was mobile app coupled with, you know, new business model and all the other, you know, trading firms were charging you like $5 per trade,

you know, that kind of thing. And, you know, Robin Hood actually, you know, had a profound impact on the market, right? On the service level, it's just like, oh, they just like charge zero fees. Like that's not really something that's interesting. But actually the second third level impact was that it onboarded a huge amount of retail, you know, into trading. And it's where, it's where, like Wall Street bets came from, right? And there's so many other things that happen, you know, as a result. That's just for, you know, perp-dexas as an example. If you look at, you know, Dex's, you know, Uniswap has like billions in TVL on L1 and across like all their different depths. That TVL could be used to, one, give the yield back to the LPs. So now you're increasing, you know, basically like

the yield rate for people who are market making effectively for Uniswap. So that can actually, you know, deepen liquidity because if you can increase the rewards, you're going to have, you know, more participation. Another thing that could happen is, you know, all of this drama around the Unosop fee switch, you know, there's a world where actually Unosop just monetized off that yield and they never had to turn on the fee switch and they actually never have to worry about what happens when they turn on that fee switch, right? Because, you know, I guarantee as soon as Unosop turns on that fee switch, there's going to be competitors that are trying to vampire attack Unisop with a zero fee model. Of course, we'll have to see if it works, but you know that that's just going to

happen. And this world is like, you could actually completely circumvent that entirely because now you have a protocol that can fund itself in this, you know, kind of invisible way, because people don't really like fuel yield intuitively. I think that's why like the dollar supply increasing is like so invisible to people, right? Inflation is like so invisible to people on the hill it gets like really bad. So there's a lot of things that you can do with it that you can't really do without having that primitive billing. Historically inside of the Ethereum ecosystem, we've illustrated ETH staking as like the opportunity costs. Like the 3.5, 3.8% rate that you get from staking your ETH is the payment that the Ethereum protocol is paying you to forego any other opportunity costs that

you would have in defy. And this is true, like, when you put your eth into the ETHUSDC pair on uniswap, you're not staking your ETH, right? When you're lending out your ETH inside of AVE or compound, you are not staking your ETH. You're getting rewarded for it, but it comes at the cost of not being able to also stake your ETH. And so it's really always been, like, do you either stake your ETH or you use DFI and you never really get to do both? But really, you seem to place a lot of emphasis on the aligning of incentives. Maybe one very simple way to articulate what Blass is is it's defy and staking rather than defy ore staking. Is that like a dumb way to put it, a simple way to put it? Yeah, I think removing the opportunity costs, the and, changing the or to the end is like a

very simple way to put it. But I think that that's a good description. And again, this has really significant impacts because we know that when interest rates are zero, right, in the U.S., like now there is no longer this or, you know, psychology that I have to go through. it's actually, it goes to an end, right? Because you're earning 0% anyway, so you might as well go and deploy that capital into the market. And we know that that is a very different market that we operate in than when you have interest rates at 5%.

And now that ore is actually quite significant. And basically we're changing the ore to an end. The other thing that comes to mind is that being a developer becomes a lot easier to leverage in all of the yield if you don't have to think about it. And so previously, like if you were building like GMX on Arbitrum or any other defy up anywhere else, you would have to think about like the opportunity cost,

that you're giving up in trying to like manually rewire yield back into your app by re-denominating in like Lido-staked Eath or like staking natively inside of your own protocol. That's like overhead for all the developers who would manually have to like wire that up. And so what you've done at Blast is just you've wired it up natively into the whole entire layer two without breaking compatibility. So like the developer overhead is much easier. Like they get efficiency out of the box by being inside of blast. Yeah, exactly. Although I would say it's like it's not just like over head. Like in some cases, it's like, it might just like not even be feasible, right? Because there's

a certain like contract size limitations. There's also just like gas limitations. Like if you're taking an ETH and you have to like reroute that into a different contract to get like steep. And then when users want to like take that out, you know, I have to like unwrap the seat somehow, right? So you're probably going to have to, you know, like, sell it. Maybe you're taking slippage and maybe that's just like unacceptable. Right. So maybe you have to now keep like a separate pool of like ETH. So you're not actually able to like stake the entire ETH that you take in. You have to take like, you know, 80%. And then if more than 20% it gets withdrawn at a time, Now you have like a very difficult situation where like the withdrawals either take a long time or you have, you know, incredible slippage for the users.

Like, you know, it's not just that it's like overhead. It might just like not really be feasible given the, you know, technical constraints and also just like the business constraints of the DAAP. So when you have the ethnic natively yield bearing, that just really changes things. Now that isn't to say that like DAFs can just like copy paste, you know, what's on Ethereum L1 and put that onto blast and take advantage of it. They can do that and their DAFs will actually just work, you know, fully without having to do anything. we have like some very interesting basically we have modes for different daps where they can actually either opt in to take advantage of the yield or not and this we had to design the system so that you could have this kind of like on-ram period where daps can actually deploy onto blast before they fully take advantage of the native yield and have this like transition in order to take advantage of the native yield like you do have to actually like change like what you're building right it's like if you're building a perp dex that's charging you know zero trading fees and you know monetizing off the yield it's like that's you're going to have to code it a little bit different than if you're doing a perp-dex that charges fees. So it's like, it's not just like, oh, you kind of get it like without any effort, but it's more so it actually makes it possible for you to kind of put in some of the effort to

design a new system to take advantage of it when it wasn't really possible before. Where does this yield come from for Ether Pac-Man? So obviously it's from kind of east staking, right, which is sort of, again, the risk-free rate for Ether. But is this inside some sort of a staking pool? Like is it, you know, under the covers, is it all going into something like Lido or what is this coming from? Yeah, that's a great question. And, you know, actually, this is something that we saw criticism on that we're like, wow, this is people like really not getting the path forward here, which is kind of interesting to contend with. But basically, the yield for the ETH is coming from Lido, it's coming from Scyth. The yield for the Sablecoins

is coming from MakerDAO's DSR. And on the topic of like using Lido, this is the infrastructure that the protocol uses during this bootstrapping phase. In the long term, Lido is not going to be the only protocol use. It might not even be used at all. What's really important is that the layer two gets to choose like what strategies are applied. Lido was chosen initially because it's, you know, the largest e-staking protocol has, you know, over $20 billion in it. That's like a very large security bounty. So it made a lot of sense to us to rely on that, you know, initially. But in the long term, the L2 can basically replace Lido with other additional, you know, liquid staking protocols. And actually, you know, the nice thing about this is like, it can actually decentralize

like with staking even further because lighto has like a crazy amount of share right and all those deposits are controlled by lido but in this case all the blast deposits are controlled you know by the l2 itself so the community in the future could actually you know divest away from lido and actually you know basically decentralize the staking pools even further than it is today and that was actually something that i saw a lot of criticism on because people were like oh like they're using lido they're just like making lido like even more of a threat to the system is like no it's actually like the best way that you could actually probably decentralize assets out of Lido in the future. You just have the thing on a longer time horizon.

So is there a notion of like other modules, like yield modules that you could leverage as the layer to. So ETHENA comes to mind as like another place to generate native yield in dollar denominated terms. There's eigenlayer for not just ETH staking, but now also restaking for additional yield. So what is the thought about the evolution of where yield actually hooks into blast? Yeah, so this is something that we're going to have to work with the community on. I think ultimately anything done here has to be a community-driven initiative. If it was not, I think that really affects the governance of the system.

Like, I think it has to be community initiated. But to the extent that any of these initiatives are put forth by the community, I think at minimum, you know, and this is something where we still have to define the process, right? So like this is something that will come out. You know, once, you know, we're right now still in like the building phase, like the the bootstrapping phase, it's like all the focus is pretty much on helping DAPs on the to actually take advantage of the native yields. So it's really more so on the application layer.

But when we think about like the yield layer and, you know, what improvements can we make there, there has to be like a lot of process that's, you know, defined for it. But I think it's really important for the community to think through and analyze, like, what are the risks of any of the models, right? So like, you know, Eigen is clearly like a very interesting model that has like a ton of TVL. There's a lot of people that put their trust in it. But I think Eigen is like relatively new, right?

And I don't think they've even like turned on their ABSs. I'm not like super deep into the system. but it's like, that's correct. You know, slashing isn't even like possible right now. Also correct. Right? So you have a ton of value in the thing, but you don't actually know, like, how much slashing will occur. And hopefully, you know, they turn it on and there's like no slashing. And everyone's just earning like a lot more yield. And, you know, basically like for free. Like that is like definitely the hope. But we don't actually know that yet. And that's not like to neg Eagan or anything like that. It's just like I think for like the L2. When you think through like, you know, what is driving like the yield for like assets on the entire chain, you have to choose things that have, you know, better security.

profile, like a better track record, you know, more lindy, right? This is why, like, Bitcoin is where all the value accrues, because if you want something else, it's like a better digital gold, it's like, you don't really have the track record. You don't have, like, the, you know, the trillions and security budget that Bitcoin has, right? Because if you can attack Bitcoin, you literally have, you know, trillions of value that you can unlock there, and they haven't really successfully attacked it yet. So, you know, that just shows that there's a lot of trust that you can kind of put in it. You know, similarly, I think for any new strategy, whether it's like Igan or Athena, you know, you really have to look at, you know, what the security profile

of that strategy is. You know, I think Athena, similarly, like, on the Sablecoin sign, it's like, okay, they're basically democratizing the basis trade. Like, that's great. That makes a lot of sense. But there's, like, you know, we know ways in which the basis trade doesn't work out, right? If the interest rates go negative, if you switch from a full market to a bear market, you know, you can have these issues where we're now, like, you're no longer earning yield.

You're actually losing money over time, right? So you have to, like, really think about each of these different strategies and in terms of, like, you know, ultimately it's like securing the value on the chain itself. So I think that, you know, will. Will the L2, you know, basically decentralized the yield in the future across like multiple different strategies? Like, absolutely, yes. Is that something that's going to be like super fast or should be super fast?

Like, no, it needs to be something that's like very, very thoughtful because ultimately it's like the security of the entire chain. Yeah. And I even wonder if you'll ever want to go there. I mean, it's kind of like when we were talking about forklifting, upgrading the US economy to T-bills. Imagine doing that rather than T-bills yield from corporate bonds. Even if it was like a massive company like Apple bonds, for example, I mean, would you really

want to risk forklifting your entire economy and making it run on Apple bonds rather than, you know, risk-free rate of T-bills is kind of the question here. I was just going to say, like, I don't really think it makes sense to, like, have different types of yield. I think it's okay to have different providers of yield. So it's not Lido versus, like, lending to some random, like, firm that's, like, you know, giving you some interest on that rate. It's like Lido versus, you know, like the next biggest liquid-saking protocol, right? Or some other, like, liquid-saking protocols. A rocket pool or something. Yeah, exactly. So while we're talking about yield, we've been talking about ether most of the time, but you also slipped in that stable coins have a yield here. And it comes from

die, the DSR, you said, so the die savings rate, I assume. So if I move dollars into this thing, what happens? You know, I understand what happens with my eth, but do I get yield-bearing dollars? And can I move USDC in this? Or is it just limited to die? Can you describe what that looks like? Yeah, definitely. And actually, I'm happy to touch on this. And there's another thing, which is not stressed as much, but actually really important as well, which is Blast as an L2 actually gives all of the net gas revenue back to the depths. So we had to come up with like pretty novel mechanisms to actually do that in a secure way. And I'm happy to talk about that. And impetus for that was like when we thought from the ground up like what could an L2B, we kind of realized that that

would be something that we really valued as builders. But just to touch on the Sablecoin side of things. So basically when you bridge over like USCC, USCT, U SET, you know, Dye to Blass, what you get on the receiving end is USCB, which is Blast native Sablecoin. And USCB is, you know, is a yield-bearing civil coin. So, you know, basically goes from, if you have one USCB in your wallet today in a year, it becomes, you know, 1.15 USB. The current, you know, interest rate for USCB is 15%. 15%. Wow. Yeah. And that comes from... That's coming from DSR, right? The die savings rate? Yeah, it comes from MakerDAO. So basically, when you bridge over your assets are put into MakerDAO's DSR, and MakerDAO recently updated their interest rate from 5% to 15%. And where that yields comes

from is it's a combination of things. A portion of it is there's various like T-bill, like strategies that MakerDAO has that it's like Monocel is like Clyde-Sale or something like that. Basically some of it is in, you know, off-chain like T-bills. A lot of it is also just being lent out. So, you know, Maker-Dow is this protocol where you can like deposit ETH, right? If you deposit like one ETH, you can basically mint like a few hundred dollars of die, right? It's like an over-collateralized lending protocol. And basically the borrow rate for that die is 15%. Got it. That's very cool. Let me ask you, you were talking about sort of robustness of the system and, you know, like the different sources of these yield, how you have to be

very careful. It strikes me that the entire setup, though, of this system is for like a positive interest rate environment, a positive yield environment. And, you know, like recently in COVID, of course, we saw rates go into, for some central banks in some countries, kind of like negative interest rate territory. I'm not saying that could happen with ether, but it's not completely off the table. There are some protocol upgrades that might make that a possibility. in the medium to distant future. And also the DSR could get into negative rate territory. What happens to blast if some of these assets start getting negative rates?

Does capital just flood out? Or have you thought about that scenario very much? Yeah, it's a great question. And actually, it's interesting because a lot of what is implemented for these individual protocols, right, like whether it's like Lido or Maker or, you know, a lot of these different, like, you know, yield-bearing protocols is something that, the L2 itself also implements. So pretty much like every protocol has this insurance program that they run, right? Whereas like they have this insurance pool. And in the case of like adverse events,

they can deploy that insurance pool to make everything whole. And, you know, for the most part, I'm pretty sure that hasn't really needed to be deployed. But that's what these underlying protocols, you know, utilize. And similarly for the L2 itself, it also utilizes an insurance pool. So that insurance pool grows over time. And basically, you know, to the extent that like insurance pools of the underlying protocols are kind of like blown out, then the, the L2 itself has an insurance pool that can be utilized. And this entire system, I mean, yeah, we can talk a lot about like insurance, like the finance of insurance is like really, really interesting. But it's basically just like you're borrowing from the present in order to pay off like debt in the future, right? Because like,

you know, in a long enough time horizon, you know, maybe something adverse happens. And if you borrow enough in the present, you can actually like pay off those adverse events in the future. That's like basically how insurance works. And that's basically the same model that the L2 has. I was thinking less insurance, though that is great and it's important to kind of cover that and more actual like rates of ether itself going into kind of negative territory because there have spent some talk of this as a potential in the future we've done a bankless podcast i did it with ounce car so some ability for there to be like a hard cap on the number of eth validators potentially which you could send rates into kind of negative territory and the reason that the protocol may want to incent for this is so that not like 100% of the eth you know it doesn't get staked

right, Ethereum might decide that's not in the best interest of the Ethereum network. We start to get negative staking rates here, right? I guess capital kind of floods out of the system and maybe that kind of equilibrates and balances out or maybe it stays negative for a while. What happens if ether goes negative? Again, this is a hypothetical in the future, but probably comes into play if your entire layer two is based on eth yield. Yeah, that's a great question.

That's a very interesting model. If like the L1 were to upgrade to do that, I'm sure it would be something with like months and months of preparation ahead of time. So I can't imagine a world in which that happens, and the L2 is still staking its ETH to get like a negative interest rate. It would just operate like every other L2 and not sake the ETH. So I think like the simple answer is that it would just stop staking it in like Lido, right? It would just keep the Eth in the bridge, which is the default on every other L2. And the system is built to basically handle variable interest rates. So if the interest rates went to zero in that sense, because like now is no longer getting

state, then the layer will basically be able to update to handle that. They're not really need to be any changes made to do that. It would just be like, okay, now, you know, if you have one ether in your wallet a year from now, it's still going to be one E. Pacman, get back to this last thing that you mentioned earlier. The net gas revenue goes back to the DAP. So I actually wasn't familiar with how that work. Can you describe how that works in blast? Yeah. So basically, the way every L2 works today is, you know, the Dows, or it might just be like the foundations behind the L2s, they're earning sequencer revenue, right? So it's like, you know, people are paying a certain amount of gas to use the L2, and then the L2 is paying a certain amount of gas to put those transactions onto the L1. And usually there's, you know, a difference between those.

And the L2 is like actually like millions in profit from that net gas revenue. And those foundations, you know, typically keep that revenue from themselves, which, you know, makes sense given their business model. But something interesting that Blass is able to do is because it has this yield as a new primitive, it can afford to actually zero out the gas revenue. So, you know, I kind of talked about how this yield enables like new business. models for DAPs that aren't possible today, but actually it enables new business models for the L2 itself that aren't possible today as well, and that all the net gas is actually given back to the DAPs that are generating the transactions. And I also think that this is really interesting because now you can kind of build new types of DAPs that monetize in different ways, right? Like if you have a DAP that, you know, isn't really, you know, accruing a lot of TVL, but it's actually just like used a lot, right? Like maybe it's like the disperse app, right? or like, you know, some random daps like that, you can actually monetize that DAP through the gas

because they can basically just, like, call a function to basically send all the net gas revenue to, like, a separate address. So, like, that's, like, one model. The other thing is you can have, like, assets, whereas, like, maybe instead of having, like, a token where you charge, like, a, you know, 5% tax, maybe you can just have the token, basically give all the net gas to the creator. And now you can have, like, a new business model, you know, like, for that token. Similar with, like, an NFT, it's like every time that NFT gets traded or used in, like, a game,

whatever the net gas is, you can actually, you know, could be sent back to the trader. So that's like another primitive that I'm really excited about. But any of these new primitives is going to take time for it to play out. Like it's, you know, we've only been live for at this point, you know, 18 days. I'm really, really happy with where the ecosystem is today. It's like over a billion of TVL in the DAFs. It's like the second largest L2 by DAAP TVL, right? Third largest by bridge TVL, but second by DAF TVL, which I think is, you know, just as important, if not more important. But in terms of like the builder life cycle to take advantage of these primitives, it takes like a number of months to actually go and, you know, build something new. Like, if you're, like, a legit team and you're

building something that's providing value to the end users, like, that's probably going to take you at least three to six months. And that's if you're, like, a really quick team. So I think it's going to take a long time to kind of see this play out. But it is a primitive that I'm very excited about. There's recently a competition of sorts that happened on blast for all these different projects that are incubating themselves on blast. There's like a hackathon of sorts where there was a competition for blast points and, like, support from the blast team. What kind of projects did you see? What would the, if you just kind of gave us the lay of the land of the projects that are building on blast, what do they kind of look like? What are you excited about? So the purpose of the Big Bang, honestly, the name was like fairly descriptive. The purpose was basically just to kind of like start up the ecosystem from zero. And so we actually focus on very basic categories. Those were, you know, perp dexes, spot dexes, lending protocols, you know, NFTs, gaming, you know, socialify. So those were the key categories that we focus on. And we focus on those, you know, those are categories like everyone already.

knows. We focus on them because, you know, this is a new layer. We need to boot up the ecosystem with this fundamental infrastructure that we know exists on every layer, right? You know a spot X is going to exist on every layer. You know a perpdex is going to, you know, a lending protocol is going to. So those were the types of apps that we saw. Something that was really exciting to us is we saw the level of like nativeness that we saw amongst the submissions. I think before the competition, we kind of just assumed like, you know, if you look at like every L2, like they kind of have all the usual subsects, right? They have like Unisop deploying.

They have like AVE deploying. You know, you have that like same basic infrastructure. And it makes sense for those, you know, applications to go and, you know, deploy on those L2s. But the thing that I was really curious about was like, okay, how many of these teams are actually going to be like blast native teams where it's like they're very clearly tied to the blast ecosystem. And, you know, some of them are actually doing interesting things with the yield already or

some of them are planning to. But, you know, regardless of where they are at in that like development lifecycle, like they're, you know, bought in and their ability. building. And that was the thing that stood out to me the most. If you look on Defy Lama right now, if you look on the DAPs and you look at which ones have TVL, pretty much like every top depth that has TVL is a depth that only exists on Blass. It's not on other chains. It's like a blast native team. That was the thing that was really impressive to me. Like it was not something that we like planned for or something that we hoped for. But the fact that, you know, that was kind

like an organic development was really cool. Right. And this is because you can't just copy and paste, like AVE or Uniswap on to Blass because you actually do have to rewrite some of the code to fit the native yield-bearing nature of Blass, correct? Yeah, it's a little bit different, actually. So you can just copy-pase other than Uniswap. Actually, I'm pretty sure the Uniswop Foundation is, like, deploying on Blass, like, this week or something like that. They had reached out.

So it's like, you can actually just deploy because we set up the system such that DAPs can actually opt in to take advantage of the yield. And we did this so that you could have existing players or existing contracts that, you know, are tried and proven, deployed very, very quickly. But in order to actually do something with the native yield, you do have to modify the contracts. in order to do that.

So I think that, you know, if I were to, like, understand, like, why, I don't actually know why it seemed like there are so many, like, blast-oriented teams in the competition. You know, if I were to, like, guess, it would be that, you know, something that we really stress is that we don't really care for things that just exist in other L2s. The only thing that's interesting, you know, to us is builder is about blasts. And the thing that I think is the only thing that makes it enduring is that it enables, you know, new types of depths that aren't possible on other L2s. I think that's the thing that probably is what drew a more native crowd.

Of course, we're going to have to see that play out over time. It's going to take time for people to actually do the programming necessary to do that. But I think that just like conceptually, that's probably why it attracted more native builders. But I'm not like God, so I don't really know what went inside the head of all these builders. But I think that might be why. Sure. Yeah. Maybe just to bring this conversation full circle, are you going to put Blur on Blast?

Yeah. The blur, you might send the Blur account tweet something in February, late February, I think February 29th. But Blur will be coming to Blass in April. Pacman, can you update us on kind of the security? So you mentioned some of the FUD or some of the criticism when Blass was first launched, right? I'm reading one crypto headline. Blast TVL hits $390 million with no product. The three of five multi-sig contract promising air drop in 2024 would be a top five TVL.

Basically three to five multi-sig contract. I'm also looking on layer two beat, which is, of course, I think, a pretty objective source for the security profiles of various layer twos. you've got two of the five slices of the pie in green, congrats on the green slices, and then three in red, which I'll note is similar to OP Mainnet. What is the current security profile of Blass? Is it still a multi-stick? What does this look like? Yeah, so stepping back a bit, the security profile like of the layer is very similar to Optimism Mainnet. The original like source code started off as a fork of the OpGath, but it's quite different now. And just to kind of give some like intuition around that. You know, OptiD. Geth started as a fork of Ethereum Geph, right? Go-Etherium. The codif between Op-Geth and Geth is smaller than the codif between Blast-Geth and Op-Geth, the version that was originally used as a base. So, you know, because of that history, it's a very similar, you know, model from like an L2 perspective to optimism. When it comes to the security, so every L2 bridge basically operates the same way where every L2 basically has a multi-sig that's used for upgrades. And there's many

important reason for that, but like whether it's arbitram, optimism, base, polygon, blast, it's all the same security model. I think the reason why Blass generated so much noise for it is because I think this is one of those things where it's like, for people who are like really deep into the weeds, they would understand the security model is actually the same across the board. But for people not in the weeds, they'd be like, oh, it's like this contract, which I was have like a live L2 on top of it is just like a multi-sig. Like that's like a really easy like takeaway to take if you're like not really deep into the weeds. But if you actually get deeper into it, it's actually the reality of it is that every L2 effectively has the same security model from

this perspective. Now they might operate in different ways, but when you consider like security and the different attack vectors, like they all kind of like share this like risk surface area. I just think that it was just like an optics thing. It was very easy to kind of call that out about blast specifically. Pacman, you are now number three or at least blast is, by total locked value behind Arbitrum and OP Mainnet. And pretty early in the journey, I would say as well, are you going for number one? Like, you know, are you competing up the charts? Is that the end destination?

What do you think it will take to continue to grow here? Yeah, I think there's a difference between emergent outcomes versus the inputs. And for us, the input is we want to build the L2 that provides the most value to developers is in users. The most value of any L2, that's our goal. And we see the path to getting there is, you know, you have this L2 with native yield where everyone's just earning that by default, but also now you're enabling new types of applications that are actually, you know, like Robin Hood, for example, right, like them charging, you know, zero fees. That's actually providing more value to the market than if they charge no fees. So it's like these business model unlocks.

It's not just like, oh, it's a new business model. It's like, no, this is actually providing more value to the market. This is why these like disruptive business models get adopted in the first place. So the only thing driving us is that we want to build the L2 that provides the most value to end users and developers. I do think that an emerging outcome of that is that conditioned on accomplishing that goal, we would be the largest L2 by TVL and usage. But the input is really just how do we provide the most value. Are you going to join the OP super chain? Is that part of the roadmap or have you already? No, it's different because my understanding, I actually have a only loose understanding of the OP super chain.

My understanding is that it's basically all OP SAC forks. It's basically like each chain is like a copy paste of the OP sack base and they're basically just like different instances of it. So it's like different like go to markets maybe. But Blass is like very different from optimism at this point. So it wouldn't, I don't even know if it would like technically possible. I don't know like what can like is it actually like a technical thing when something is part of the super chain or is it just like an OP sack fork is technically part of the super chain. But either way it wouldn't be part of it just because it's quite different now. Yeah.

To answer some clarity on that, it starts off being an OP stack fork. and then beyond that, then you can opt into the optimism collective and then you're a part of the super chain. If you're technically differentiated from the OP stack fork, you can still become a part of the super chain. It is just another technical lift in order to formally enshrine blast version of the OP stack as a verified thumbs-up part of the OP stack Superchain Optimism Collective. Is that more of like a governance like vibes thing or is like a technical thing? Like could Arbitron become part of the super chain or is it just like a label? No, Arbitrum cannot become part of the super chain because you have to be an O.P. Stack fork to start there. I mean, like, maybe that's technically not true. The closer you are to be technically similar to the O.P. Stack fork to the actual reference code, the closer you are to getting into the super chain. But beyond that, then it turns into a vibes governance thing.

So it's a little bit of both. Like, how technically differentiated are you? Because that is a technical lift in order to make homogenous block space a thing. But then once you are within, like, reason, it's kind of like Argentina is never going to be. become part of the EU, although the EU could technically vote in Argentina, but it would still never happen. It's kind of like that. And so like being technically differentiated removes you from being part of the super chain, but then you could still lobby to have your forked version of the OP stack as a verified part of the super chain. And then there, you could have like multiple blasts be a part of the super chain. You could have blasts get forked into blast two and three and four. And then all of those would be like approved modules inside of the super chain. But then ultimately, it is still a governance, collective unionization kind of thing, just to provide clarity there.

Yeah, that makes sense. I guess my model would be like, you know, if China thought it was valuable to become part of that EU, maybe it would, but it's probably like not going to. It's probably going to stay independent. And I think that's probably the case for it for Blast. Yeah, that makes sense. Pacman, this has been really cool to just understand you as a builder, you know, going through blur, going through Blast. I'm wondering about kind of your current commentary out in the state of just crypto right now in 2024. And in general, I guess, I would say maybe a few themes. Of course, yield has been front and center in 2024 with everything

eigenlayers doing. Certainly, you're contributing to part of that with Blast. So has layer twos, right? Sort of now it's being pitched of we've got, you know, the modular stack and all of these Ethereum-based layer twos and Ethereum line layer twos, and they just got, you know, a new EIP-4844 that's decreased the gas and, you know, gas fees are down versus this monolithic approach from Solana and some of the other parallelized chains. layer ones that are developing. What's your take on all of this? How do you think it's going to play out specifically on the chain wars side of things? Do you like the modular approach, monolithic, do you think it's going to be some of both? Who do you think kind of nets out as a winner here?

Yeah, I think that when it comes to the chain wars, you know, especially in financialized spaces, typically there's extreme power law outcomes. And I think the intuition for wise, because, you know, there's network effects to these systems. Liquidity tends to concentrate. it doesn't really disperse, you know, over time. So I think the outcome that you'll see is kind of similar to what you see now, which is, you know, you have one dominant layer one, right? That's Bitcoin. Then you have the next most dominant layer one, which is, you know, Ethereum.

And then you have the next one, which is Slana. And if you look at like Ethereum to Bitcoin, it's, you know, like a three X difference, like Solana to Ethereum, it's like a two X difference. And the drop off is like very extreme after that. So I think that the end outcome, you know, and I think L1 will like always kind of get a bid because there's always going to be people who are like, oh, what's the next Ethereum or what's the next Solana. So I think there's always going to be, you know, some noise about that. But in terms of, like,

what is like the end, you know, structure, I think that it's, you know, likely the case that there's really going to be only, like, two to three relevant ones. You know, to the extent that, you know, Ethereum and Salana kind of have, like, different, you know, stakes in the sand. I think that they can, like, all coexist. I think that's still regardless of, you know, which path is, like, right, it's just going to be very clearly there's going to be, like, a power law outcome, just regardless of how it goes. Pacman, as we maybe finally close this out, has been great. Do you have any advice to sort of, you know, I consider you sort of a, you know, Gen Z builder. I don't know if you're officially in kind of that generation, but kind of like younger up and coming. I'm like the oldest

Gen Z. So you're an elder Gen Z at this point. Do you have any advice for any up and coming crypto Gen Z builders? Like, what would you say to them? A younger version of you. Man, it's so hard to give like generalized advice. Like I'd really have to, you know, see like a specific builder because everyone's going to have like different skill sets. I think ultimately, though, I think the thing that should drive any builder is, are you able to provide net value to the end users, like differentiated value to the end users that doesn't exist elsewhere. You know, I think there's a lot of, you know, trend surfing. There's a lot of, it's really easy to kind of like look at the market and be like, oh,

this is like a big market and actually like get into it and like go and, you know, build this kind of protocol because this kind of protocol has been proven to be valuable, you know, by the market. I think that that is something like, I see a lot of across the board, but that's not really the thing that's interesting. What one is, I don't think that's really how you, you know, build something great, but also So it's just like, that's like not an interesting thing to do for you, like, spend your time on. I think the only interesting thing is, like, can you actually provide something that's, like, creating value for the end users or for the stakeholders that are involved? You know, if you're doing that, then I think you're probably on the right track.

If you're not, then you should probably reevaluate what you're doing. Well, thank you so much for joining us today. Pac-Man, this has been a lot of fun. Thanks, guys. This is really fun. Bankless Nation, got to end with this. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier.

It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.