Bankless - Ethereum's Next Decade | Vitalik Buterin

Episode Date: August 11, 2025

Ethereum just turned 10, and Vitalik Buterin returns to reflect on the last decade—and where it’s headed next. In this conversation, Vitalik shares what surprised him most about Ethereum’s growth, the hard lessons from challenges like The DAO and NFTs, and what he’d do differently if starting again. We explore Ethereum’s evolving cultural identity, privacy as a core value, the tradeoffs between L1 and L2, and how Vitalik envisions Ethereum surviving an AI-dominated future. ------ 🎬 DEBRIEF | RYAN & DAVID UNPACKING THE EPISODE https://www.bankless.com/podcast/debrief-ethereums-next-decade-vitalik-buterin ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ------ TIMESTAMPS 0:00 Intro 0:52 Ethereum’s First 2 Years 2:25 Ethereum’s Top Contributions 4:18 Biggest Surprises 7:37 What Took Longer than Expected 9:05 Overcoming Challenges 11:03 Lesson for Younger Vitalik 15:53 Bitcoin vs Ethereum 18:49 Ethereum’s Cultural Evolution 32:11 Privacy on Ethereum 37:42 Nation State Resistant Privacy 43:03 Cypherpunk vs Mainstream 56:05 World Ledger 59:09 Ethereum in 2024 1:02:23 Changes in the Ethereum Foundation 1:10:10 Economic Alignment 1:16:38 Scaling the L1 1:31:21 Ethereum’s Barbell Strategy 1:39:28 Ethereum Nationalism 1:48:28 ETH Treasuries 1:55:19 The Next 10 Years for Ethereum 1:59:35 The Next 10 Years for Vitalik 2:01:25 The Next 10 Years for Bankless 2:02:52 Closing & Disclaimers ------ RESOURCES Vitalik Buterin https://x.com/VitalikButerin 2021 Endgame https://vitalik.eth.limo/general/2021/12/06/endgame.html Convex and Concave Dispositions https://vitalik.eth.limo/general/2020/11/08/concave.html ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

So what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years? A future of computing. We're a trustless vision of security that is based on cryptography and verification of code. The era of trust me for security starts looking as archaic as the era of not cleaning our water looks to us today. We've already gotten there with HCTPS. I think we need to get there with everything else. And I think Ethereum can be a huge part of making that happen. Ethereum just turned 10 years old. And we have back on the podcast, Vitalik Buterlin.

Fatalik, welcome back to Bankless. Thank you so much, David and Ryan. It's great to be back. So first, happy birthday Ethereum. The Ethereum white paper was published all the way back in 2013. And then the Ethereum Mainnet launched in July 2015. So 10 years later, Vitalik, how has Ethereum turned out compared to what you envisioned? I mean, definitely is far bigger than I was expecting.

I think that's the most important thing. Also, you know, it's definitely taken longer than I expected. It's definitely turned out to be more than I expected, I think. When I wrote the November white paper, my plan was still that this would be a side project that I would quickly get done over a couple of months and then go back to university. and of course that ended up not happening. And then at some point we thought that, you know, we'd have four stages. We get to proof of stake.

And then exactly at that time, the foundation went out of money. And then the project would just kind of sit on its own from there. That also didn't happen. Then, you know, of course, all of the defy started happening. And the various different waves of people launching different kinds of tokens had started happening. And a lot of that was written in the white paper. you know, we had derivatives in the white paper as a use case, and that actually exists, though.

Of course, you know, the words that people ended up using are often different in a couple of cases. ENS happened, stable coins happened, but at the same time, lots and lots of really fascinating surprises. Now that we have just 10 years of Ethereum in our rear view mirror, there's a lot that more or less went according to plan, I think, you read the white paper and then you look at what Ethereum is, you're like, yeah, that actually kind of followed suit with what some of the original visions were for Ethereum. Looking back, what has Ethereum uniquely contributed to the world that perhaps you are most proud of or most happy about?

I think it has contributed to openness and decentralization and just being a norm and a default mindset for a lot of people in a way that I think. needs to be refreshed every generation, right? So, you know, what kind of traditional free and open source software was in the 1980s and in 1990s, I think, you know, the blockchain world is in a large part meant to be, yeah, basically that, but for the 2010s and 20s. And I think for a lot of people it has actually done that. It's contributed to making a lot of things possible.

prediction markets are one of those examples. Back in the early 2010s, they were mostly an idea, and I think Ethereum was the big experimental ground that really took them from idea to reality. The whole concept of DAO is, of course, lots of ups and downs in that space, but just generally taking governance of organizations and structures that control resources. and turning that into something that's like much more hackable. I think very, very proud of that. And I think we're going to keep on seeing dividends from that over the decades. So, well, a lot of different things.

Vital, you mentioned some surprises along the way. I can imagine there have been a number of surprises, one of which is kind of fascinating trivia, is you expected this to be a side project. And it's turned into a, you know, a 10-year, more or less full-time engagement and pretty massive in terms of scale. What were some of the big surprises, though, along the way with Ethereum, things you didn't expect? The Dow getting such a huge amount of Eith, and then, of course, breaking almost immediately.

I think in retrospect, the first was like a bit more surprising than the second, but still. Like, that was like, I guess, a runaway use case. It was sort of an early defy use case in a way because it was all about capital formation. And, you're like, suddenly, man, I don't recall. But suddenly it was like 5% of all eat supply or something incredibly massive at the time. It got all the way up to 11% of each supply. Actually, I'm trying to remember, was it 11% of all ether? Was it 11 million east?

Because if it was the latter, then it would be like 17%. But it was, yeah, it was crazy high. It was the first instance of like animal spirits kind of really rearing its head on Ethereum. Okay, so that. What else along the way? I mean, of course, ETC. That was the, yeah, the hard force. War and then I love how it was almost like a TV series where just as the ETC chapter was

winding down at that exact time the Shanghai Dostack chapter began. You know, the writers put that at exactly the right time. Maybe it was the same writer, I don't know. But that was such a fascinating series of technical challenges. NFTs were a big one. I was not really expecting anything like NFTs. all. I mean, definitely just like the scale to which Defy grew once it actually started.

Going from just a uniswap barely existing in 2019 until just like the really big boom that we had even only a year and a half later and other things. Well, proof of stake taking much longer than I expected, of course. ZK happening like five times faster than I expected. That was good. the sheer level of institutional and then even government interest that came almost from the beginning, like even in the 2010s, there were lots of, like, a lot of big companies that were floating around

that were really interested in the space. A lot of governments were interested. I think a lot of that early interest was like very abstract and I think just people trying to like either be in a or showed that they could be innovative. But even still, it was not something that I expected. And then now, of course, we're seeing the institutional interest come back, but in this much more concrete form, other things. One of the meta things you mentioned, Vitalik, is that all of this took longer than you thought it would,

at least when you published the white paper. Why did it take longer? And when you say, like, take longer, are you talking about it's taken longer to kind of, you know, get to proof of stake in the first place to sort of implement the roll-up roadmap? Like, what specific pieces took longer than you originally thought and like why? Part of it, I think, is just software being hard in a way that I did not have the experience to appreciate. Part of it was also, I think, us just setting higher and higher standards for ourselves, right? Like the version of Ethereum that we wanted to get out in a few months was actually what we would today call a layer two on top of prime coin. And then, of course, what happened was that we saw the amount of attention and interest that we got in January and we realized like this is something a lot of people are putting their hopes into.

This deserves a much more serious job. And so we decided like, hey, we would actually make a proper L1. and I mean, of course, you know, at the time, L1s where it really made sense to build old twos on top of them. We're not really something that existed. What else? Yeah, I think it's probably a combination of those two things. It's like technology taking longer than expected and us.

So just like continually raising our own standards. In Ethereum's history, you talked about some of them. There have just been some of these huge challenges that were just totally unpredictable. The Dow Fork being the first one, the Shanghai attacks. But even in times of Ethereum success, like the NFT mania in 2021, there were also challenges to the Ethereum Project. And, you know, the Ethereum Project has just been faced, it's just a series of challenges over and over and over again.

And I want you to comment on like how Ethereum specifically, how that strategy has emerged as a culture, as a community, as people inside the Ethereum Foundation, people in, you know, Ethereum core devs in the Ethereum community, we've developed responses, strategies. We have a particular strategy to overcoming challenges that is unique to Ethereum. And now that we have like kind of 10 years of data, how would you articulate what Ethereum's unique strategy is for overcoming challenges

that are inherently unpredictable? I mean, I think we do a really good job of approaching the problem as an ecosystem. Like there's always a lot of different. approaches that get tried at the same time. There's generally an L1-based approach. There's some kind of application layer approach. Often there's multiple competing approaches in each category. And like we, I think, actually are able to pursue a lot of tracks in the parallel.

We're able to even get a lot of synergies between different tracks, particularly in the way that like a whole bunch of different efforts in the space simultaneously contributed to making a, is Zika Snark's more mature that all helped each other? Yeah, I think, like, the style of collaboration that the ecosystem has developed, I think, has been, has proven really fascinating. And I think it's, you know, definitely has not been perfect, but taken altogether, it's worked quite well. If you could go back in time to a younger version of Vitalik

or a younger version of the Ethereum Foundation and teach them something that would help them. in Ethereum's journey. When would you go back and what would you teach? I mean, one answer that comes to mind is, of course, all the way back to the beginning and just everything we know about ZK Snarks. Like, that just has been such a powerful, like, game-changing technology in so many ways. Just in the sake of leapfrogging Ethereum ZK technology 10 years.

Yeah, exactly. Like, I think there have been a lot of these, like, technical wrong, either wrong steps or like side roads that we've taken that we did not actually really need to take. And like had we, if we were just knew what the end state actually looked like, then like there were situations where we would have saved a lot of resources and a lot of cases come to things much more quickly. So yeah, I mean, you know, not being able to predict the future is definitely

one of those annoying downsides of Ethereum. Yeah, I mean, it's interesting. is people do ask me, like, what would I have, like, what time capsule message would I have sense to myself? And, like, a lot of the time, the answer just is, I mean, like, one of these is kind of just, like, just give myself the correct answers technically sort of things. But then I wonder, like, what kind of other, what other answers there even could have been, other than just a big warning to be more realistic in terms of expecting timelines. And there's like, sometimes I think to myself, you know, like, might there have been ideas on the, yeah, I guess you could call it more social side or economic side that in retrospect could have made things quite a bit better.

So, like, one of those examples potentially is, you know, should Ethereum have had a, like, time limited, I mean, like, portion of the supply. I don't give in to public goods based on, you know, like, even some crappy mechanism that we knew about back in 2014, right? And, you know, the argument there would basically be then that, like, we could have potentially been able to have, you know, like, no explicit pre-mine, but then have, like, basically something like miners voting based on, you know, like, flags in the past thousand and twenty-four blocks. I mean, like, on who gets the developer awards. And it possibly would have led to very similar results or potentially even more funding for both the foundation and other organizations. But it could have bought us more credibility in the earlier days. One of the things I think about is also, like, could things have been done better in terms of the early relationship with Bitcoin? Like, I think it's kind of always a bit sad that Ethereum was not even.

to kind of capture more Bitcoin momentum. Like, okay, maybe, yeah, like, here's one of the crazy, crazy or hypotheticals. Like, if, for example, Ethereum had, like, one, done the issuance based on the formula that I said, and then two, like, let's imagine if it actually had been a fork of Bitcoin. And then, like, it just said, basically, hey, we are switching to proof of stake. We're going to start with some crappier proof of stake on day one. But then, like, we'll basically issue the industry. entire, like an entire remaining 4 million Eath based off of, I mean, like some developer

formula, right? Potentially, the, like, Ethereum could have just been the Bitcoin big blocker camp. And, I think, I remember, I mean, imagine you guys have probably read, you know, the, the reviews I've had of the, like, the big and small blocker sides of the block size war. And I wonder if, like, basically, if, like, Ethereum had just been the Bitcoin blockchain the whole time. Like there probably would have still been a fork, but like the whole thing could have potentially proceeded much more productively.

So like that's one of those things that I sometimes think about. But then like there's, but it's easy. You know, there's unintended consequences and surprises in all directions, right? Like it's possible that if you drag an existing community with you, you have lots of stakeholders from day one. And then there's just like a lot of things that you end up not being able to execute well on. So I don't know. Like, I mean, it's always struck me that the, uh, the Bitcoin kind of religion or philosophy is as somewhat evolved into monotheism. And so I, I wonder if any kind of

split coin would have always been destined to divide that community and, and splinter them in some way. I like, yeah. But we're 10 years in now, right? And Bitcoin is what? Are they 16? Something like that? Yeah, 15. Yeah. Well, 16. Yeah. Okay. So, you know, we're, we're all kind of grown up together. I guess, you know, Ethereum's entering its teenage years. And I guess Bitcoin has just learned how to drive, something like that. Do you feel like the relationship is improved between Bitcoin and Ethereum? Or is that just the ratio? I feel like Bitcoiners are always nicer to Ethereum folks when, you know,

Euk is suffering on the Bitcoin ratio. So they're kind of quiet now. But when price direction changes, maybe things will change. But I feel like there's less hostility maybe between the newer cohorts of Bitcoin. pointers and Ethereum. Like, how would you characterize the relationship today? Well, it depends what you mean by the new cohorts, right? Because I think there's like different types of new cohorts.

There's the people who are trying to be technical and trying to do BITVM and Taproot and copcat and all of that stuff. And then there's the sailorists. And like, I don't really, yeah, expect the sailorsists to ever be particularly friendly or to have like any, yeah, especially aligned values with, uh, if, you know, Ethereum, I, yeah, it's in, on the technical side, I mean, I think, you know, there's definitely, yeah, I mean, the, the smart ones, you know, I think there's, they have a lot of respect for the things that Ethereum is doing in terms of like both the technical progress that it's made and increasingly the way the ecosystem is standing up for privacy. I think both more and more openly and more. a way where like we're not, we're not just bringing vibes, we're actually bringing results. And on that at the same time, I think it's, you know, a lot of people respect how, like,

people in Bitcoin actually are really trying with, like, Opcat and some of these, like, new Bitcoin lawyer to ideas. And there is quite a bit of, like, really fascinating technical work there. So, you know, I think it's definitely more positive in that way. When you see people building on Bitcoin in, like, the technical way, like people building on the BitBM trying to make Bitcoin more expressive. Do you ever think, man, you guys are just wasting your time, just come build on Ethereum. That's what we build the Ethereum for.

That's what it's for. Or do you actually look at it with curiosity and optimism for what they can do there? Some of both, I guess. I want to ask about the current moment of time that Ethereum finds itself in. Recently with the election of Donald Trump, we've seen a social trend shift both inside of crypto and outside of crypto. And maybe just to kind of name this social trend shift, I'll describe it as a feminized W-E-F-soy-boy mentality shifting to a Bronze Age mindset, to quote someone on Twitter.

Kind of like, you know, out with a woke, in with a base. This is kind of the current zeitgeist of culture in this time. And we saw this in crypto too, where many projects just kind of like jostled to position themselves as like USA-based projects. We had that infamous like Salana Marketing video about one to invent technologies, not genders. And now we're seeing this still today in the cultural debate that's like spawned

out of like Sydney Sweeney's genes. Notably... Oh, God. Has that infected crypto yet, David? Oh, I mean, I see it on my time line. It has now. Congratulations. I mean, you know, this episode is the memetic super spreader of edge. Yeah, right, exactly.

So notably, Ethereum has not participated in this trend shift. What if you're, whatever... By the way, I want to publicly thank Sidney sweetie for not making any NFTs, hopefully, or me. You've also given her an idea, Vitalik, so watch you out. So I want to ask about, like, whatever Ethereum was before this cultural trend shift, it still is today.

And I want to ask, is that by design? Is Ethereum supposed to be this bulwark against the changing, like, zeitgeist, the changing fat of the times? I mean, Ethereum is, I think, supposed to be a pluralistic ecosystem of that. incorporates a lot of different people and a lot of different viewpoints, though at the same time, especially in a world where there's many different cryptocurrencies and many different ecosystems, you are going to get different levels of drift, what were kind of self-selection happening organically. I mean, even if Ethereum was the only cryptocurrency, like, I think you'd expect to see

like differences in cultural reliance between Ethereum and AI for example, right? And I mean, I think it's the duty of each project to just try to make the best and most upstanding version of the philosophy

that is, that its members are most enthusiastic about and comfortable with. And like hopefully we you know, the result of all this is that we get things that are productive and that's

improve the world across a lot of different directions instead of just projects that fight each other in like either fight each other or that like basically get stuck in this mentality where all that they do is just kind of shout vibes and then

I'm gonna just have like one group shouting one vibe another group shouting another vibe and they it'll feel very righteous but then you come back in three months and you realize they haven't actually made any progress and so like I think personally,

I, yeah, like, there's definitely things that worry me about, I know, quite a lot about various cultural shifts that we've been seeing in the world. But then, you know, if you just worry, then ultimately, you know,

you're just one of the fibers. And so I think the practical question is, you know, like, how do we actually advance and respond and actually create the next and better version of a competing alternative, right? And so I think in that regard, like the couple of new themes this year have been, and so one of them is that I've tried to kind of say and do things to sort of reset

the conversation on public goods funding in DAWS, right? Because like, I do think those are important topics. And I do think that, you know, if you just give up on funding public, goods if you give up on, but basically any form of governance other than founder dictatorship, like that still has a lot of quite negative consequences. And, you know, the end state of that is that you just sort of get back to like essentially trust me land. And but at the same time, like quadratic funding has actual problems. Like token voting delegation DAWS have really big problems. And so I've been trying to be supportive of prediction market-based funding and prediction market-based DAOs. I've been working with DeVanche quite a bit. I mean, he's been doing

deep funding, which is like public goods funding, and there's a version two, which is pretty directly based on prediction markets, basically combining together like prediction markets with this jury mechanism that's like basically, the, you know, basically, the The idea is that if you have a gadget that can give an opinion of like a high quality opinion of how valuable something is, but it takes a lot of effort, then you can use prediction markets as a way of scaling it. And my underlying philosophy is to try to like replicate the best aspects of free markets, but for the public goods funding domain, right?

So create that, you know, an open, well, what political scientists call an open access order, like a game where anyone can come in and if they do a good job then they can succeed and they can feel like they have a fair chance than something that doesn't devolve into being a social game, something that doesn't devolve into being a game of convincing a few central actors

and then trying to actually push that into some actual experiments. So Devanch and the Quaristian, I've been doing somewhat quite a bit of work there. And then the other big thing that I've been like really trying to push is this greater focus on privacy, right? And I think, you know, the reason why is because first of all, privacy is like it has been a core part of the cypherpunk spirit since the beginning, right? Like if you remember Chommy and E Cash from 1982, Chalmy and E Cash was actually not decentralized, right? like it had a central operator that all of the transactions went through, but it was private,

and it was private from the central operator, right? Because those were the properties of the technology that we could actually do. And it was because of technological limitations that we flipped over and we went to Bitcoin, which was decentralized, but it was not private. But now, of course, we have ZK Snarks. Those technological limitations are gone. And we actually can be decentralized and private, right? And so we actually should be.

And so there's been some really interesting work that's been starting to happen in terms of like really, yeah, standardizing kind of railway privacy pools type of things, making it easier to incorporate privacy protocols, looking at privacy of reading the chain. So basically, like, if you're an ordinary user and you have a browser wallet and you don't have two terabytes to spare, then, you know, what is. a way for you to access Ethereum without just revealing all of your data about everything you're doing to Infura. And so there's been some really fascinating cryptographic and academic work that's been happening there. And like I think there, like it's, I actually, like I think in terms of cultural triangulation, my role model there is Millay, right?

Because if you look at what Milley did, I think it's actually kind of brilliant, which is that he basically had, like he has Bronze Age vibes, but his substance is actually the same, basically the kind of stuff that I think all three of us support and would have supported at any time in the last 15 years, right? You know, he has made markets more free. He has made the government more efficient. He has really reduced inflation.

He has simplified a lot of things in housing markets. He has done a lot, right? And he's also, he's reduced tariffs. He's made the country more, more open. I mean, his government even, you know, like, has, like, worked with us to make it easier for people to get visas for DevConnect. So actually, like, in a lot of ways, I mean, like, on the substance, he is, you know, like, very not, I mean, like that kind of substance, but at the same time, you know, he has the

vibes of the other side, and so he manages to like appeal to a lot of people very successfully. And like, to me, privacy actually has a lot of those same properties, right? Because privacy, privacy is freedom. Privacy is a very important, right, that we're all here to protect. Privacy is something that's, that just has to be built, technologically speaking. If you have privacy as a focus, then it is a, what the game that you're playing is a game that's about doing and it's not, and it's not about talking.

But at the same time, you know, what privacy is not is privacy is not multi-billion dollar grifting. Privacy is not, you know, people ripping off T-shirts and something their chests a lot. Privacy is

not, you know, we're colluding with all politicians, like, in So it's one of those things that I think really everyone in the Ethereum ecosystem should be able to get behind. And so I think it's something that we just have to really keep pushing forward on. In the wild west of Defi, stability and innovation are everything, which is why you should check out Frax Finance. The protocol revolutionizing stable coins, DFI, and Rolex.

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or accessing liquidity. Want to stay in the loop on Unichain? Visit Unichain.org or follow at Unichain on X for all the updates. Well, let's talk about it some more because I think that's like an interesting cultural component of how we balance kind of Ethereum values versus like this mainstreaming moment with Tradfyes to talk about privacy. So I guess Malay you're saying is he's got, he's sporting the Bronze Age mullet, let's call it, where you know, it's it's bronze age in the front, but it's good sensible policy and getting things done in the back. It actually works. And so how do we bronze age mullet our way to privacy on Ethereum? I mean, it does seem like, it seems like in some areas we've made tremendous progress

on the cryptography side of things. Like we have ZK technology. That's just like incredible. But times where we've tried to implement privacy, I mean, tornado cash, we've got the live court case going on. We don't know yet the verdict at the time of recording of Roman Storm. And so anytime you get into financial privacy, you get nation state pushback. And there's an argument that I've always thought.

was somewhat valid, that if Ethereum or Bitcoin, for that matter, shipped privacy, you know, on layer one from the very beginning and it was all private, we would have never gotten this far in terms of broad acceptance because there are forces out there that would have strangled this technology in its crib. And so how do we about, I guess, what's a realistic way you think privacy can evolve, right? We've got these very niche applications, I would say, still like tornado cash and even things like rail gun. They can do some things. It's not user-friendly. It's not broad. It's certainly not privacy by default. You've got things like Aztec that are spinning up. They're going to be in main net, but that's going to be its own separate roll-up. How do we balance all of these things

and get to a place where we're happy and we're content? And I guess maybe nation states that try to preserve some level of freedom also feel fine with letting this move forward. Like, what's a realistic privacy roadmap here? Yeah. Okay. So I think there's two parts to that. One part of that is just, like, how do we get from privacy? being very niche to privacy being a default part of the experience. And question two is how do we make a critical mess of governments and regulators okay with that? And I think for question one, so the reason why I have not supported like literal on-chain layer one privacy, yeah, like 7503 and like wormhole type of stuff so far is not because I think

it's fundamentally wrong, but because I think, like, it's basically too early technologically to make that kind of commitment. And what I mean by that is that, one, we don't yet know exactly which technology is will be optimal. And if we put a technology in as layer one, then we could be locking ourselves into something very suboptimal, right? And this is obviously a concern with any EIP that we make, but with privacy because, like, the data is inherently private. And, it, like you can't just kind of muck around and, like, basically replace the tree and, like, search and replace one thing with another if you really have to. And so it's like, it's harder to upgrade, right? But Talak, does this imply that you believe privacy on the Ethereum Layer 1 is fundamentally

correct? I, yeah, I mean, I think in the long term, I'm very open to it, right? So one argument is that, right? It was, I mentioned, like, future compatibility. The other argument is security, right? Because, you have to remember that a privacy gadget on 01 breaking would be extremely bad because someone would be able to steal an unlimited number of coins undetectively. And I think eventually the tech will be good enough that I think we will be able to make that jump. I am serious when I said in my recent blog post about two weeks ago that there is a trend line that the number of bugs in code actually is trending down to zero. And so we will get to the point where we're going to be able to have very high levels of trust in code

to the point where like security researchers who have been trained on the past the past 20 years will find it unimaginable. And I think AI will accelerate that. But like before that, and also Zcash to their credit, like they've been brave and they've just like gone ahead and done it. Right. But even still, like that's a high bar. And so the question is, can we make privacy as default as possible without making it layer one? And to me, the medium term target is to make privacy defaulted wallets, right? And the way that we do this is basically that I think the biggest mistake that we're making as an ecosystem right now is that we came up with this concept of a privacy wallet, right?

And like, we should not have privacy wallets. Privacy should be a feature of wallets, right? Like, you know, you should, like, privacy features should be something that can be incorporated into existing wallets. What are you talking about? So if I'm in my existing crypto wallet browser extension, let's say, are on mobile, there's an option. Like, I can send a transaction normally or I can send a private transaction, that kind of default. Exactly. Like, you have private balance and a private send button, and it's all like part of Metabasco, Rabi, or Ambire or whatever.

Can we do that now? And why don't we do that now? Yeah. I mean, there's actually, yeah, some work that's starting inside the EF to try to move things in that kind of direction already. So hopefully, yes, some of that should come out over the next few months. What about the other part of that question, which is how can we get nation states? Like obviously projects like Ethereum want to push the overturn window towards more privacy, more open source, more decentralization, right? And so to some extent that will be anti-some, you know, governments, some cultures that don't

embrace that, but we want to push the culture over. And also, we want mainstream acceptance of this thing, right? We can't have it illegal in all of the countries of the world. Is there some sort of balance we can, like, get to get some of the nation state concerns around criminality and money laundering and also balance the cypherpunct values here? Are these just incompatible? Yeah. So I think, first of all, like, all of the progress that we've been making on, like, the privacy pools concept over the past couple of years, has been very good, right? Like, now Railway, like, Railgun exists and you can use it,

and there's successful cases where we can point to where it's actually prevented people who have hacked large-scale defy contracts from putting their funds into it. Privacy pools doing very similar technology. So, like, that whole concept is starting to be more battle-tested, right? And, like, the thing to realize so far, right, is that in terms of illicit funds that pass through privacy protocols, like by far the largest portion of it is people stealing from Defi protocols

or possibly people get some cases stealing from individuals, right? And in both of those cases, like both of those are actually very amenable to this kind of like privacy protocol level black listing, right? Because

you know, if your money gets stolen, then like there's just, presumably there will be just an API where you can just like basically flag your own coins as being suspicious, right? And if a defy project gets hacks, then it'll do the same thing, right? And so I think like that already is something that can really push things forward quite a bit. In terms of like how much more we can or we'll need to do, I think the thing to keep in mind, right, is that like the fiat ecosystem is definitely not.

a paragon of bad actor resistance, right? Like there's all kinds of bad actors that have all kinds of ways to move money around to anonymize themselves to avoid detection and, like, the equivalent of, you know, like, seven proxies and all of these things. Like, well, look, there are ways and they get, and they know how to use them, right? And given that funds are transparent on a public blockchain, in at least in the sense of like you can point to transactions that are happening. And, you know, if you're, if something happens to your money, like, you know, you know when it's,

it's getting moved. Like, I actually think that getting, uh, getting, uh, to a level of, like, bad actor resistance so that or unfriendliness that approaches the fiat ecosystem, but at the same time, giving people much more actual privacy is like probably quite doable, right? So I think to me, that's like one part of those prongs. And I think the second prong is that like we do just need to make the positive case for why greater levels of privacy are important and including being important from the perspective of law enforcement type objectives. And like for me, the motivating example of this is that like there's been a couple of these cases like it actually happens all the time now. Most recently there was like telecom wiretap data, like the type of data

that basically telecoms are required to collect and that give to the government under the communications assistance to law enforcement act. A bunch of that got hacked. And I believe like it's the evidence is leaning that it got hacked by China but or some China affiliated actor. But like actually yeah, I mean, like I have no idea. I'm not like all of these things are probabilistic. And Like, that's just one example. And, like, actually, you know, this happens in all kinds of directions among all pairs of nation states

quite a lot recently, right? And so, like, a world where, like, every... Basically, a world where you have this kind of centralized data collection running rampant is a world of fragility because if those databases get hacked, then data that you think might be contributing to now, national security just in case will actually end up contributing to national insecurity, right? And I think like that just is a case that needs to be made much more strongly. I mean, like, two lawmakers

to the to the public in general that's like aggressively minimizing data collection is actually the safe thing to do. And this is the thing that we should be moving toward and privacy preserving finance as part of that. So I think you're signaling that you at least would like to hold firm in crypto and Ethereum on privacy, right? And it's like this goes back to a broader culture question, I guess, I want to ask about Ethereum. It's been my observation of the last, you know, like 10 years, that some of the cypherpunk things that we've tried have worked, but not in their idealized version, if that makes sense. And so right now we're at a moment very much in Ethereum's history where we are on we're actually onboarding the world. I mean,

stream is coming, like Robin Hood doing a layer two and J.P. Morgan talking about doing stuff on chain and Coinbase getting larger and larger. They're all coming to Ethereum. And so there's kind of a question here about when you get some of the traditional finance and mainstreaming who don't have cypherpunk values, right? And you're talking about Ethereum pluralism. Okay. So we let more people into Ethereum, but with this pluralistic idea, but they're less cypherpunk. They care less about the values that maybe we care about. And so there's a question of like, Where'd we draw the line? Because I think about something like stable coins.

My idealized version of a stable coin would probably be something like Rye. You remember that project, Rye? Okay, so it was all ETH. It was all completely decentralized. It was all crypto-native. Guess what? That didn't work. Like, no one wanted it.

There wasn't product market fit in the Silicon Valley parlance. And what has worked, circle, tether, these other less idealized cyphid point punk stable coins. But they are helping people. I mean, go to emerging countries, and this is exactly what they sort of use. I guess the question is broad. How to, when should we hold fast on cyphurpunk Ethereum type values and when should we adapt to the world around us and really prioritize product market fit and actual usage? Yeah, I think there's a couple of places that are like really the most key in terms of

prioritizing privacy and cypherpunk values. I think one is, of course, the low level protocol, right? because, you know, you can build a centralized or decentralized application on top of a decentralized back end, but you can only build a centralized application on top of a centralized backend. And for, I think similarly, like, there are places where if the blockchain is fundamentally not at least friendly to privacy and friendly to dis like intermediary free ways of accessing it, then like that just does not create space for the privacy friendly, yeah, things to happen on top of it, right? So like one of these examples is this is the reason why I've been continuing to work on account abstraction

and continuing to improve EIP 7701, basically because I think if we do not do that, then any smart wallet use cases or any like multi-sense quantum resistant, and also privacy protocols, they will only be able to function through an intermediary ecosystem, right? And the thing with intermediary ecosystems is that that's like exactly the sort of thing where, like, they work until they, yeah, they don't work for you, right? And so, you know, like there, like, there does needs to be some constituency that's, like, really, yeah, watching out for these kinds of things and just making sure, you know, is it at least

possible to interact with Ethereum in a way that is privacy preserving. Also, for example, in a way where you're not depending on a centralized intermediary to do your basic things if any servers that you talk to disappear, like that does not lead to any of your funds getting stuck. And so, like, especially at the lower levels, these are things that needs to be really watched out for. And then I think the second aspect of, of this is that the strong privacy focused and I would say intermediary minimization focused like way of doing Ethereum. It needs to at least be possible, right? And part of that is the protocol layer. Part of that is doing some of this work on the wallet layer, on the application layer.

And I think to me it's fine if the majority of people do not take that option. But what we do not want to see as we don't, we don't want to see a world where the infrastructure to do that does not exist. And we do not want to see a world where the top level protocols like ERC is and standards are like just in some structural way hostile to it. Right. So, I mean, maybe one analogy to this is, I think email is like actually a really great analogy to mine, right? Because theoretically, email is an open protocol. Anyone can make an email server like you can go get a VPS. I mean, know, you can get a DNS account and, like, you can set up, you know, David, like Ryan and David email.com and then give yourselves, I mean, Ryan at Ryan and David email.com,

David at Ryan and David email.com. If you want, you could even write all the software yourselves and like the, you know, LLMs make that like actually way more practical for you guys than you might have ever imagined. But at the same time, you know, the problem you run into is basically okay, you've got your own dinky little email server, but then by, by defaults all the big providers blacklisted, and they're blacklisting it because of, like, basically spam, right? And so de facto email ends up relying, like, being much more of a centralized and, and permissions thing than it could have been, right? And so then there's a question of like, well, you know, look, what things could have been done with email to try to preserve

its openness better, right? And I think, well, like, basically, what you want to, you to, like, basically, you want to ask the equivalent of that type of question, but then for any particular standard that comes up, right? So for standards for moving tokens from one layer two to another layer two, right, for like intent-based standards, right? Like one of the things have been making sure is that for some of these intent-based like trade tokens on optimism for tokens on arbitral approaches, like make sure there is a way to do it without talking to a server, right?

And like, it is totally doable, right? And the challenge is that, I mean, if you, if you don't think about it, then, like, all the standards end up kind of assuming at the lower level that there's servers that you talk to and then, like, you just get privacy leaks, right? And so I think, like, having people in the right places that are just watching for these kinds of things and that just make sure that, like, privacy friendly, intermediary optimized, like, more self-sovereign ways of doing things. actually exist and don't have at least like a needless performance penalty to them is important. And if not everyone takes that option, then fine, right? Like if a bunch of people, like, starts like continue to hold their coins inside of Coinbase, then fine, right? If a bunch of people continue to use Meta mask that directly, you know, like fully trusts inferior without any protection and they decide not to add any of the,

any of the protection based on, you know, like either Helios or some of the private RPC stuff that we're starting to do, then like, fine, right? But like the place to start is just the option existing and the social norm that a like protocols and standards that get built have to take into account the need to be at least accommodating of people who take that option. Yeah, great news for David and I too, is Ryan and David. email.com is available right now. So we can just go spin up a VPS and stuff to EAS now. I wonder if any I, yeah, I will, my agents have already registered, David and Ryan Eel.

Good question. I want to get into some more narrow topics about Ethereum in more recent times. But in order to get there, I kind of want to ask one last zoomed-out question to really kind of frame the stakes of some of those incoming questions. And so I want to present. the future. There are particular versions of the future that we know are coming our way. We know AI is going to define the future and we can talk about the different ways that that looks. There are also geopolitical tensions that seem like they're on the horizon. There's seemingly an increased balkanization of the world. There are just possible versions of the future out there that

are like kind of scary. And you know, there's other possible, you know, there's other things to talk about that are also kind of cool, like gene editing and all that kind of stuff. There's just, the future is coming. What role, Vitalik, do you think Ethereum has to play in the future that we know is coming our way? By the way, I'm glad that we're on the same page that gene editing is the exciting thing

and AI is the scary thing, right? I think, you know, there are plenty of people that, like, have that flipped, and I think, like, the version that you described is the correct one. But, yeah, well, role can Ethereum play? I think to me the answer has always been in two parts, right? So one, like the fundamental product I think that Ethereum offers is, you know,

protecting people's freedom and self-sovereignty and ability to organize in a way that does not depend on or is, you know, like any kind of mask for any individual, you know, like a person or company or a nation state, right? And I think in a world that is more balkanized at the physical layer, like, that's a very valuable thing and that's an increasingly rare thing, right? Like, if you turn back the clocks, you know, the clock 15 years ago to like Facebook, like, I think basically, yeah, there were a lot of people who were willing to give Facebook the level of trust that today we will, like, we pretty much all agree that is a level of trust that is only really deserved. to give to something that's like a blockchain, right?

And so 15 years ago, I think, you know, in that sense, sort of the market was not ready, right? Because, like, the whole idea that trust issues are something that you have to worry about was not really there. Like, famously, it was the era of privacy is over. I remember, I mean, there were a lot of people, you know, Mark Zuckerberg's real name policy famously more than I personally remember hearing people like basically saying privacy is over at cloud computing conferences. And then of course, you know, fast forward 10 years. And then like even those guys are starting to talk about things like TEEs now. And so I think in that sense, you know, the market for trust technology is something that's ready.

Like it's, and I mean market in like a very expansive. metaphorical way, right? Like, there's people who are willing to pay money for these things, and then also there's people who have, like, say, social problems that they care about, who are willing to embrace these kinds of technologies as a part of the solution. And I think that's that like that exists to a much greater extent than existed 10 years ago. So I think that's part of it, right, which is just building the technology that actually is able to do those things. And the second part is, like, I think there is an unavoidable aspect of this, which is global community building, which is basically that Ethereum is this powerful intellectual attractor for people who care about decentralized finance,

for people who care about new forms of creating organizations, for people who care about things like prediction markets, increasingly for people who care about privacy, for people who care about making like democratic modes of organizing actually work in a technologically advanced society. Like there's a lot of these different topics that Ethereum ends up being adjacent to where I think like the community itself is a valuable good, even in a hypothetical world where let's say yeah, tomorrow we discovered that I mean, OP equals NP and we all had to pack up our bags and go home in terms of block in terms of blockchains because cryptography can't exist anymore. Right. So I think that's also something that's really valuable to continue building on.

In the early days, there was this meme of Ethereum as kind of a world computer that has kind of ebbed in flow as a meme that's worked. In your May post earlier this year, you called Ethereum a world ledger, which I think that resonates with me and feels less abstract, a bit more concrete. Maybe to some folks, it won't. But to me, it sort of implies, okay, it's a world ledger that I can use to register things. like property, for instance. And another thing I keep coming back to of, like, what is Ethereum? It's a decentralized property rights system. I get, for many Normies, that's still a bit too abstract. But to what extent do you think that encapsulates what we're trying to do here?

Ethereum as a world ledger. Yeah, I think to me, the really valuable thing about Ethereum as a world ledger is, like, The problem with the world computer is that a computer is like an inherently super expansive concept, right? Like computers do everything for you. Like computers generate your cat pictures now. They, you know, they used to look at your cat pictures. They can convert your cat pictures into videos. They can translate the thing that the cat is holding up on its sign into German and then, you know, do a video into it's a video for that.

Okay, I have lots of cats and AI examples clearly. but the point is they can do lots of things for you, right? They can categorize your life. Okay, how about that? But basically they do lots of things that are just obviously totally inappropriate for especially the Ethereum one, right? And so the nice thing about Ledgers as a word

is that it feels like it encompasses the subset of a computer that's like really highly economically valuable. And I think, I mean, obviously the word, Lager has these very financial connotations. And so it's also very clear to see what it implies in the context of DFI. But then it's also, I think, very easy to see the metaphor for, you know, like what the equivalence of a ledger is for something like EMS, right? So, and then the nice thing about that term is that then it starts to, like, I think

the thing that I specifically said is that the Ethereum L1 is the World Lager, right? And so I think it also at the same time tries to make the, yeah, really. between L1 and L2 more clear, which I think is one of my explicit goals. And I think, to the extent that people picked up on the phrase that's definitely been successful at those things. If Ethereum is the world ledger, what does that make ETH? Okay, great. Now we have to figure out what is like the ledger equivalent of gasoline.

I mean, I guess it's ink. I mean, okay, fine, ink is a layer two. But like, if ink has the TM symbol beside it, it's the layer two without the TM symbol, then it's like, yes. Is that okay? It works for me. I want to zoom into some of the conversations that was ongoing in the Ethereum community in 2024. I'll just kind of say, I'll define 2024 as like hard times for Ethereum, mostly just due to the decline of the relative ETH price. And it kind of created a bunch of infighting and what to do about that fact in the Ethereum community.

Do you think Ethereum had a rough 2024? Is that what you felt? I definitely think so. How do you account for that? How do you explain the story of Ethereum in 2024? Yeah, I mean, I think, I mean, the low Eath price was definitely one of those very big aspects that led to a lot of things. I think a big part of it for a lot of people was also that like some storylines were ending without other clear storylines replacing them, right?

In the sense that I think there were definitely people who became kind of quietly disillusioned with DAWS, but like it wasn't clear. You know, if you're the sort of person who likes DAWS, but then suddenly DAWS don't work, then like what else do you do? Then in NFTs, we're also kind of dying down in 2024. Meme coins were definitely on the rise in 2024, but then at the same time, I think you know, Ethereum people just by nature wants to, you know, make a serious difference in making the world a more free and open place. And it's kind of harder to see how meme coins contribute to that. And also, of course, I mean, the largest meme coins were all happening on Solana. So what other, I mean, there were like a lot of these. I mean, also, I think another big part of it was, you know, the whole like layer one versus. layer two thing and how

kind of post in people sometimes like pin it on 4844 I'm not sure to what extent that's actually true not 4844 but or actually yes 48444 and like having an independent fee market for for blobs and like

basically the question of like well are L1 and L2 actually yeah co-operative and then like once there's a realization that there's this like more misaligned incentives like that naturally leads to infighting more. So I think it's a combination of all of those actors, right?

Or all of those factors, right? Like it was a moment where, you know, the price was falling in at the same time. It felt like, you know, there were a lot of storylines were kind of meeting their natural end. And it wasn't quite yet clear what is the new thing that would actually come and replace them. Where I think that new thing has to be something

that both is a moneymaker and that, the Ethereum community could get behind intellectually. I mean, I actually think in 2025, we're actually starting to see answers to some of those questions. So I think that's one of the reasons for the positivity that we're seeing now. Yeah. I mean, there's still debate in Ethereum today about how much of the story of 2024 was just narrative siops versus actual real problems that needed to be fixed.

Like with the story, one of the big stories was that like the Ethereum roll-up centric roadmap would just became not what we thought that it would be. The fragmentation between chains was pretty bad. Every chain, every layer two feels like a brand new chain. And in contrast to that, the layer one was just trying to not, wasn't really trying to scale. And it just kind of felt like there was the story out there that the Ethereum roadmap just felt incoherent to what it's like end game was supposed to be, which is this global, unified world computer.

And then downstream of that, there were changes made at the Ethereum Foundation, or perhaps not downstream of that. Maybe that's part of the Sciop. Maybe you could actually kind of just fill us in and illuminate in the parts of the EF that many people aren't able to see. Why were there changes made at the EF?

What needed to change, and where is the EF today? I think this is one of those cases where there were a lot of things that were coming for a long time, but you just needed any kind of trigger to make them actually happen, right? So, I mean, the change in leadership was one of those examples, right? And I think, like, Aya has actually, you know, like, I think feeling happier in the, yeah, her current president of board role.

And she, you know, continues to be active in some, some projects around, I think, adoption in Bhutan was always, like, one of her interest and there are some other things on the financial inclusion side that she has been spending more

time on. The executive director job is definitely not something that any one person should be in forever and I like lasted longer longer than like basically everyone else at the EF combined.

So that was and then there were also like new voices that have a kind of new emphases, I think. I mean, Tom and Shellway are both very strong technically in their own different ways. At the same time, there's been a lot of new people

who are leading, like, different parts of the foundation and different initiatives. So one, like, kind of organizing the effort around scaling and U.X was one of those parts. I think now one of the things that I'm focusing on is also kind of better organizing the censorship resistance and privacy side of things. And so basically there's a lot of things that are happening in terms of making PSE a more kind of focused team that's like basically moving from being about privacy and scaling exploration to about bringing privacy ideas into production. So there's a lot of interesting new initiatives that have started. And I mean, I think these are things that I think would have happened at some time anyway.

But like sometimes, you know, these kinds of extreme moments like they serve as triggers and often kind of accelerate and bring forward things that are coming and like make them all happen at one time. So that's one part. On the L1 versus L2 thing, I mean, I think the interesting thing there is how that's, like, I think a relatively disconnected topic from the EF. I mean, obviously, the work that's being done to increase the L1 gas limit is very much in that EF topic. But, well, and then also the other big thread that we've been working on

is the improving interoperability between L2s. So that's, I mean, it's actually an interesting. initiative that started all the way back in mid-20204, but it just, and I think that's like a good example, right, of how, like, there are a lot of things that happens that weren't said, just, like, all caused by everything that happens at the beginning of 2025. They, yeah, were happening already, but then got accelerated quite a bit. And there's continuing to be good work happening in terms of the, in terms of the L2 interop stuff. A lot more L-2s have become stage one. I think the next priority after stage one is going to be like so I actually think higher priority

than stage two is getting to one hour withdrawal times or actually like it's it doesn't even have to be one hour like if like there's no reason it can't be like one minute or 12 seconds like the fundamental limitation is just how much gas you're rolling to pay and the reason why is basically because if withdrawal times take an hour then or if withdrawal times take a week then is just too capital and efficient to use like native depositing and withdrawing for a lot of applications. And so like sort of trustless and L1 based ways of issuing assets are just not going to win in the long term. Right. And like what he is going to win is basically all kinds of like custom mint and burn bridges that end up concentrating power and control in a multi-sig.

Right. And so the thing that we need is for the, get L1 based approaches to actually be viable. But for that to happen, like basically, yeah, you have to bring that one hour time down, right? Or that one week time down, right? Because for that one week time, it's just if you wants to move assets from one chain to another,

like you don't want to make people lock up your coins for a week or even pay someone else to lock up their coins for a week. Like even the capital cost of that is too high, right? But if you instead of one week, you're saying an hour, then suddenly like the liquidity for intent-based upritching becomes like very cheap, potentially free for a lot of cases. And then of course, if it goes all the way down to 12 seconds, then like potentially you could see a world where like was drawing and depositing through all one just becomes

the natural way for a lot of people to move their assets between altos. So yeah, but like these things, they require a lot of movement from a lot of different actors of the ecosystem, right? Like, they benefit from work inside the EF, the benefit from work in L2s themselves, the benefit from work being done by people like succinct. The whole ZKVM effort, I mean, like, risk zero,

all of the other different ZK providers. So it's one of these, like, big things where there's just a lot of these moving parts in the ecosystem and, like, it just has to come together and, like, really turn into a concrete solution. So I'm definitely, yeah, more, like quite optimistic now that we're on a good path to getting all of those issues resolved and, you know, both having a strong L1 and having L2s with a much clearer relationship

with the L1. But, and so, you know, it's, it'll still take time to finish all the different technological steps, but in general, I think we're in a good place. Here's a take, Vitalik. And David and I have discussed kind of the 2020, for Ethereum malays a little bit, right? Not all these, a concept of L2's being parasitic, you know, and what should be done. It is true that I think David and I, most people in Ethereum feel much better about the current state of the Ethereum roadmap with some of the new leadership at the EF and also some emphasis on scaling the L1 and in particular a strong L1.

But I wonder about kind of the roll-up roadmap. And there's, of course, a lot of things that have worked spectacularly about it, you know, based deploying a roll-up, you know, Robin Hood, more recently, more tradified to come incredible adoption on that side. Sometimes I wonder and have been concerned with the fact that we have emphasized, you know, the different stages of kind of property rights, basically user property rights on Ethereum layer two. You made some progress in getting to stage one and I think we will stage two.

That's going well. But we've had less emphasis on sort of the economic alignment, if you will, and the coordination across these layer twos. There are some things tactically that can be fixed fairly easily. I feel like with UX and standards where you can get assets from one chain to another, I'm not so much worried about that. What I am worried about is lack of economic coordination between all of these actors. And so if you get into a state, I remember your 2021 end game post, which goes through

conceptually a state where you have like basically Ethereum that's decentralized and Ethereum layer one that's decentralized. And then you have maybe there's a world where you have one big rollup that has all the execution state inside of it, right? And you still make the argument, hey, that's still fine because you can have big block production, that could be centralized. We'd still validate and verify things coming to the chain. And that could be an okay state, it's maybe not ideal. What I worry about in that scenario is what happens if we get layer twos that becomes so much stronger than Ethereum layer one that they essentially get to dictate the rules. They could break away from Ethereum at some point in time.

that just doesn't seem like a good economic balance. And that's what it felt like with different chains and their own brands. They didn't feel as Ethereum as Ethereum Layer 1 did back in the day. So what do you think about this economic alignment piece? Do you think we can get that right? Is that still off? Yeah, I agree with that. And I think, like, you can look at the economic alignment issue from two different angles, right?

Like, one of those different angles is basically like, hey, L2s are not paying enough fees. and like I think you know we should have a higher min base fee and if we just set or min blob fee and if we set them in block fee all the way up to one way then like I think it would make a lot of things better and I think that's good but then a lot of the time I'm also not sure if like fees are even the right like primary variable to be focused on right I think the right primary variable is more network effects and then okay I okay I maybe I guess this is here like a place where I should I kind of explain the reasoning behind this like focus on one hour

withdrawal time a bit better right because to me like that actually yeah like the thing that you say is exactly what motivates my yeah goal of focusing on that which is basically that like if you have the thing that is likely to lead to L2's sort of de facto spinning away is basically if all of the assets are issued on L2s and like the assets are and then people move them through Mint and Burn Bridges and then basically the L1 is not actually involved at all right and the thing that keeps the L1 relevant is where assets even if most of the activity happens on L2s are issued on the L1 and the reason why I think that's important is basically, I mean, it's much better from a trustless perspective because all of these L2s, you know, they still have governance, they still have upgrade issues and so on. And so if you have the asset issued on the L2, then basically no matter, you know, where you move it, like, you have to trust that all two, right? But on the other hand, if the asset is issued on L1, then, like, you can actually natively use the withdrawal functionality. And then, like, the L1 actually is this kind of ultimate decider, right?

So it makes a security model clear, and it also makes a lot of these, like, it makes things much more permissionless because activity can more freely migrate from one L2 to another L2. It becomes more viable to have like applications that just natively do things across different L2s. Like basically, yeah, if, and then also, of course, you know, then any kind of technology that becomes developed, for doing defy operations like synchronously between L1 and L2, we'll just like naturally be much more able to work with all of those assets, right? And so I think, you know, like encouraging assets to actually be issued on L1 and making it economically viable to do that. And then just like using the standard deposit and withdrawals for doing that. Like that, like that to me actually is one of these really important pieces in terms of keeping the L1 central.

And so I think we should do that. And I think, like I personally think also, again, you know, increasing the mean blob base fee all the way up to something like one way is good. And like we should do, we should do both of those things. Continuing to figure out some of these, you know, like synchronous composability blocks, like can you make it possible for L2s to have blocks that synchronous we do things between an L2 and L1? I also think that's good.

we definitely do need to keep pushing forward on these things. And I think we do need to keep pushing that vision and that the point of NL2 is something that gains value from interacting with the L1 and from being able to offload a lot of things to the L1 instead of NL2 just being a chain that happens to have a bridge somewhere. So Dave and I very much operate on the layer zero, which is the social layer. And one kind of conclusion we've come to is that in order to sort of speak softly but carry a big stick and increase Ethereum's layer one, a soft power, you have to have a scaled out L1. That scales maybe from a transactions per second perspective, but is also the home for D5. It's the home for liquidity. It's the home. A subset of that is

for minting of the assets. And the stronger the L1, the more that you have the ability to kind of corral the layer two essentially. You give them the carrot, which is you get the liquidity of Ethereum, essentially. That's why you're attached to this. And that's why we're excited about, I don't know if you'd use the P word pivot. There's been some debate about the semantics of this, but we're excited about the initiative to scale the L1.

We're also, by the way, excited. We think that higher value ETH is essential in that conversation because ETH is a store of value asset and the larger ETH gets in terms of price, the more kind of liquidity and command you have over the L2s, if they decide to get, a bit rowdy. Anyway, can you comment on the scale the L1 path?

So it's always been in the roadmap somewhere, maybe when ZK technology evolves to scale the L1. So from that extent, it's not a pivot, but there has been some recent reprioritization, it seems like. And it does seem with the new EF leadership, that's like number one. It's scale to L1. You can scale L2 blog space as well,

but scale the L1 is a here and now thing. What's the case for scaling the L1 from your perspective? Yeah, I think the big question is always, like, how do you scale the L1 safely? And like, safely means not breaking the network, safely means not completely centralizing node operation, safely means, you know, being not breaking the staking ecosystem. And I think we actually have technologies to do that that did not exist years ago, right? So the big one, of course, is ZKVMs. And ZKVMs are like almost production ready this year in a way that was, was totally not true, I think, even one year ago.

So that's one thing that a lot of us are leaning in on explicitly. Like, I think there's willingness to explicitly say, like, we're going to increase the block gas limit by like 3 to 5x. And then if that ends up eliminating the bottom 10% of solo stakers, we're not telling the bottom 10% of solo stakers to go screw themselves. Instead, what we're saying is, well, ah, The bottom 10% of solar stakers can use the ZKVM approach to validate the chain instead of re-executing everything manually. And like that's actually safe, right?

Because well, 10% of the network relying on ZKVMs is like basically while the technology is at this medium level of maturity, like it's actually fine as long as it stays under a third. And so it's like the ZK is at this level of maturity where actually can start strategically relying. on it partially in various ways. Like you can think about it as the equivalent of sort of that L1 itself going into stage one in a certain sense, right? And then at some point once security goes of technology goes out more than, you know, L1 goes to the equivalent of stage two, and then you can start relying on the majority of the network using this kind of stuff.

So that's one part, but ZK is definitely not the only technology for this, right? So the two other examples of technologies, one of them is history. storage, right? So a big problem has been that nodes take up a lot of space. And now we've recently finally implemented the most basic form of history expiry, which expires history from before the merge. And so basically every Ethereum node has shaved a few hundred gigabytes off of its storage requirements. And then the plan is to keep on going further, like eventually get to expiring after one fork. And then like I think the long term target should be firing after 36 days.

And then for that to work well, you need to have some kind of peer-to-peer, like in torrents, network type of distributed storage so that we make sure that the chain actually does become fully accessible, like fully accessible and fully verifiable, right? So that the chain doesn't disappear, right? Like, we definitely do not want to become like ripple where like there's weird things that happen because like I think the first 35,000 blocks like disappeared or they were just not able to find them ever, right? And so that, like, so like the distributed history ideas from portal, like those are actually making their way into production.

That's another example, gas weed pricings, another example, block awful access lists, I think, are another one of those really powerful examples, because what block level access lists, what you do is they basically say every node except for the node that creates the original block can execute. the block with maximum parallelization. Like, it doesn't freaking matter of like EVM versus UTXO versus Solana, whatever, right?

Like, what happens is the node that creates the block has to execute sequentially, but it can, but it generates hints, right? And the hints are basically

intermediate states after every transaction. And then if you have those hints, then you become able to verify and re-execute the block by running every single transaction

fully in parallel. And you can even parallelize between the execution and the I.O. Right? So you can have, like, the IEO itself is actually much more efficient if it's massively paralyzed. And then that goes in like some threads. And then in other threads, you basically paralyzing, like you break up the block into

different transactions. And then basically you have like a massive level of paralyzability. That's completely independent of, like, what the underlying virtual machine model is, right? And so that also is a thing that makes it safer to run Ethereum at, much higher gas through both levels, right? So basically there's a lot of these technologies that just did not exist and now they do exist. They've been really refined and really optimized quite a bit. And because of that, we have a lot more options than we did before to get, to really get the best of both worlds. Do you think with this combination of technologies,

we can keep the quote-unquote the same level decentralization that Ethereum has while doing what Donkrad proposed, which is like, aim for a social commitment of 3x per year in terms of scalability. I don't know. Ethereum right now is after the recent block size increase. I don't know, we're 20 transactions per second. Three X per year is what Donkrad says. And then Justin Drake thinks a longer term resting point, maybe five year time, three to five

year time, something like that, is gigagas on Ethereum layer one. So 10,000 transactions per second. Do you think that those targets are realistic here? I mean, I definitely become kind of less sure of the higher end of some of those. Although actually, I think like my skepticism is probably more on short slot, like ultra short slot times than it is on ultra high TPS. Like actually, if I had to like, like if I had to choose one between, you know, what like give one second slots and that 10,000 TPS. Like, I think, like, in terms of which one is safer for Ethereum, I think 10,000 TPS with 12 seconds slots is far safer than one second slots with current level TPS because, like, at those levels who just run into, you know, like, speed of light, like, very fundamental DGO decentralization type of stuff. So, like, I personally believe in caution at the higher ends, but I definitely think there's a lot of headroomed optimize.

And, like, I definitely think we're going much further than the current 45. million level. Yeah, and then in terms of like keeping decentralization, I mean, I think we're going to be at this interesting place that's hard to judge where like actually I'm hoping that in a lot of important ways, decentralization is actually going to increase. And I can give an example of what I mean by this. So one of the things that I think everyone kind of quietly complains about is the fact that like basically no one is actually running nodes and everyone is trusting RPCs, right? And I think now actually for the first time in a while,

like I feel confident that we have a very solid roadmap to not needing to do that anymore, right? And so one part of this is of course Helios, right? And like being able to have a light client inside of a wallet and the efficiency of that continues to improve. But then one other big reason why the Cypherpunk types tends to value personal phone node operation. And this is something that, like, I actually did not even realize until, like, I personally,

yeah, spent more time to, like, actually going out and talking to some of them, right, is the ability to run a personal node for the sake of privacy, right? Because, like, imagine if, you know, you're someone who is using these Ethereum privacy protocols and you are, you're using many accounts to do many different. different things and you really care about your privacy not getting compromised, but then, like, you're still pinging in Fura about every, with every single one of the addresses that you're calling get balance on. And so if Fura still knows all of your links to everything, right? Now, running your own node is this incredibly powerful way of not having that problem, right? Because if you run your own

node, then, you know, you actually are just downloading the Yahoo chain and like nobody knows what your reads are because your reads are entirely local, right? And so the question is, well, how do we get the best of both worlds? And the answer is that we actually will be able to and quite soon, right? There's two different tracks for achieving this. So a track one is, can we start from the current concept of an Ethereum node? And can we make it much more efficient, right? And so here's how you make it much more efficient. You say, one, you do aggressive history expiry. You do aggressive expiry and not storing of everything. In fact, you even don't need to store the branches of the state tree. All you need to store is like the table that just is the state. That table is 80 gigabytes. And if you have block level access lists,

and if you have zero knowledge proofs like ZKVMs to verify that the block level access list, is correct, then you're able to stay up to date on the current Ethereum state, doing basically no local compute and only maintaining an 80 gigabyte database locally. 80 gigabytes is tiny. 80 gigabytes is the size of like three or four different LLMs, right? But like locally running LLMs. Like everybody has 80 gigabytes. Like even my phone has 80 gigabytes. And so 80 gigabyte storage, very low compute, still medium bandwidth, but that's fine, right? So that's kind of what. And then if we decide to scale L1 by, let's like be medium conservative, let's say, yeah,

we're scaling L1 by 30x, right? Then obviously 80 gigs is going to turn into 2.4 terabytes. Then 2.4 terabytes is still, it goes back to being a lot, right? Actually, yeah, it goes back to being like basically the amount that you need to run a phone note today or like basically pre-the pre-history expiry. So actually with, well, like we've effectively given ourselves that 30X of headroom already, right? But if you want to go further, there's this concept of a partial state node. Partial state nodes basically say, well, you just store all of the state except the junk.

And there's a lot of junk. And then there's a lot of like complexity lying there in terms of, you know, your definition of what the junk is. But like really, if you just say store state that's relevance to the top 100 applications and store all ELAs and all smart contract. Well, that's already going to be like massive shrinkage, right? And so that's like one direction. The other direction is to say, well, let's start from a browser wallet and let's add guarantees to it, right?

So part one is Helios and so like lines you can verify the chain. Part two is you can use technology as like in the short term, it's TEE is with O RAM in the longer term PIR, which has cryptographic level trust properties, where you you can make requests to a server without the server knowing what you requested. And like the server gives your response, but the server has no idea what it just responded with, right? And so if you make that kind of thing the standard, then like you're actually able to have this kind of strong privacy guarantee. Like you're basically able to have a light client where the light client is not just giving you the security property of a phone node. It's also giving you the privacy property of a phone node without actually needing to have a phone node.

So, like, basically we have like a couple of different paths from which we're actually able, we are going to be able to give people decentralization properties that they did not have even back in 2017, right? Like even back in the days before L1, like basically started significantly scaling at all, right? And so I think on a lot of dimensions, we get more scale and more decentralization and more privacy, more censorship resistance at the same time. There are places where I'm worried, like, Like, I think, like, continuing to make sure proof of stake stays decentralized and block building stays decentralized is, like, one of those points where I think we need to watch out for. And, like, I think having many different high-quality research teams that have different focuses and approaches is going to be really valuable there. Right. But, no, on average, I think we have, like, actually a very good track for increasing decentralization and scale at the same time when we have to just take it. I was listening to you on a recent epicenter podcast, Vitalik, and there's a quote that stuck out to me that I want to get you to double tap on. The quote was, if Ethereum gets sucked into directly playing the HFT game,

the high-frequency trading game, as a layer one, then to me, that will just fundamentally destroy Ethereum's soul, because getting into the HFT game does destroy your soul. I didn't quite follow that conclusion. I'm wondering, like, why does, you know, layer ones that play the, HFT game, destroy your soul. What do you mean by that? And how is Ethereum's layer one scaling strategy different from that? Yeah. So I think the core principle here is basically that if you optimize for one thing very aggressively, then the end state of that is that you end up anti-optimizing

for everything else to a potentially infinite extent, right? Like it's actually the exact same arguments that you hear from people like Elizor Yudkowski about AI safety, right? And like, it's just a general principle of optimization. And the thing with like very low latency, HFT type finance, is that there's always like a lower latency that you can go, right? And if you want, and then the further you go into, into lower and lower latency, the more that increases the incentives for ecosystem actors to go in that direction. And like there isn't really a natural stopping point, right? And it's a very easy route for just progressively giving up on more and more global decentralization.

And so at some point you get to things like, I mean, I can make some of this concrete with numbers, right? So like, for example, let's take a one second slot time, right? And like if you try to analyze what that means, right? So first of all, to have a slot time of one second, you have to break that up into two parts. There is block propagation and then there's attestation, right? And then each one of those has to take one X network latency. One X network latency is 500 milliseconds, right? Then average ping time from one part of the world to another part of the world is somewhere in the low hundreds of milliseconds, right? And so basically, yeah, to even be like even, even,

being able to do that at all is like a challenge that requires some pretty aggressive fear-to-peer optimization. Like, you cannot have any redundancy in there. Like, you have to have very direct broadcast. And what this ends up leading to is, like, basically, the challenge is, like, the bar that we have to meet is not the bar of, like, of capability of participation. The bar we have to meet is the bar of not having strong incentives to co-locate, right? So it's not about non-co-location being possible. It's about non-co-location being at worst only a little bit less viable than co-location, right? And then if you collocate, like basically if you collocate with a proposer, then effectively instead of having 200 millisecond latency, you have zero latency,

right? And like that's a really huge boost. And so if we go into that, like, that direction, then like the collocation incentives end up being everywhere, right? Because, you know, if you're a defy participant, then, you know, you'd want to be able to send your transactions in knowing all of the latest information as much as possible. Then if you're a builder, then, like, you actually have, like, every five milliseconds of latency that you get is gives you, or that you remove gives you an ability to send out your block 1% further into a slot. And so potentially, like, that even gets you, like, I'm not sure of the exact mathematical

details, but close to 1% more revenue. right? And so, you know, we see what HFT systems are like in reality, right? And they're like basically a bunch of co-locations of servers. Like everyone tries very hard to get, to get like very close to each other, right? And so there's this like type of activity where, like, I actually think like this is Ethereum's barbell strategy, right? Ethereum's barbell strategy of L1 and L2 is basically that L2s do the thing that that requires centralization. And they actually get the benefits of centralization, which includes the ability to do HFT, but at the same time, they benefit from L1 providing security and censorship resistance. And then they give L1 the benefit

of contributing to this shared pool of activity, but also sort of quarantining the L1 in terms of concentrating, like, making sure that some of these collocation incentives end up not affecting the L1 directly, right? Because L2s are independently sequenced. So actually, this is also one of the reasons why, like, recently I have pivoted somewhat to being, like, less enthusiastic about based L2s and more enthusiastic about L2s that just say, like, hey, we're a sequencer and we're going to get the benefits of that, right? And, like, you can do lots of things in that configuration, right? Like, you can even say, you know, you can have decentralized governance for kicking out the sequencer. And, like, that might actually be a very good approach, right? And so I think L2 does a good job.

Like L2s are the right structure that does a good job of absorbing some of that demand. Actually, if you fast forward even further, right, like we can talk about the AI economy, right? So AIs like think a thousand times faster than we do, right? And so if an AI thinks a thousand times faster than a human, then from the AI's perspective, the subjective speed of light is only 300 kilometers a second, right? So subjectively, it takes an entire second for a light to get from one city to a neighboring city. And so from the AIs, once you have an entire economy of AIs, which we're definitely going to get quite soon, then effectively the concept of a global financial ledger doing everything actually stops making any sense, right?

Like at that point, you actually need like basically city ledgers. And what is the right structure for city ledgers to be part of the Ethereum economy? Like I think L2s are just a very natural answer here, right? And so I think like basically if the L1 starts going in this direction, then a lot of centralization incentives end up up up up. And also if we commit to being competitive, then like we commit to be like if we commit to being competitive in the HFT game, then we're committing to be incompetent in a game where like every. everyone else is very aggressively optimizing while caring about decentralization much less than we do. Right.

And so I think like this is why like I think the barbell strategy is the right approach, right? Where basically yeah, like L1 does needs to improve. And I think L1 does needs to have like pretty good low latency from a human perspective. Right. Like I think Bitcoin with 10 minute block times definitely gets it wrong. Right. And like actually, if Bitcoin had a say. a 20-second block time instead of a 10-minute block time.

Like, I could see that significantly, like, making this whole, a kind of trend to, you know, like Michael Saylor-style self-custody doesn't matter, like basically, like happening quite a bit less, right? I mean, it's only one of the 10 factors, but it's still important, right? And so, like, L1 having somewhat lower swat times is good, but, like, I do think that, like, this sort of market separation where if you want, want kind of like decently low latency than you do L1, but if you want aggressively low latency, then L2 is the place to be in. We actually like do the work of figuring out how to make that synergistic

is likely to be better for us. I hear in your answer something that I hear pretty frequently, which is downstream of probably what is your most cited blog post between me and Ryan on this podcast, which is the concave versus confex dispositions blog. And like what I'm hearing is like, for example, Bitcoin, which is a convex ecosystem. They're a maximalist ecosystem. They focus on the 21 million hard cap. And the Bitcoin ecosystem and the Bitcoin culture downstream of that is all focused, is all centered around the 21 million hard cap.

And you can look at Solana and you can make that same comparison. Solana is centered around the IBRL meme, like the reduced latency, a high frequency trading focus. That's what Solana focuses around. And Ethereum tends trends to be more concave. It tries to keep all possible doors open. It tries to be more balanced. And it tries to be just a little bit middle of the road.

But Vitalik, there's also that line out there that I also kind of like, which is everything in moderation, including moderation. And if we follow that meme, that logic, that means that like, you know, Ethereum should be balanced about many things. But some things it should not be balanced about. Some things it should be convex about. And like, Ryan, my partner here, he's actually trying to, you know, beat his chest as an Ethereum person and become like an Ethereum nationalist and promote Ethereum

nationalism and kind of like Ethereum pride about the things that Ethereum stands for. If you were to have your definition of Ethereum nationalism, what would it be? What should Ethereum culture and Ethereum values be convex about? No, it was interesting because I started thinking about an answer, but then you kind of pivoted into those sort of Ethereum as a nation discussion, which is sort of fascinating in its own way. But I think maybe, okay, maybe we'll start with my, kind of the answer I was planning, right?

Which is that I think one of the other, like, really important points here is that, like, actually the world is more complex than choosing one point on a slider, right? And, like, Ethereum benefits a lot from having multi-layer structure, right? Because if you have multi-layer structure, then often you're actually able to get the best of both worlds. I mean, actually, I can give a nation state analogy here, right? Because recently, yeah, I mean, know, famously, there have been quite a lot of people arguing that it might be better to have nations that are run by dictators, right? So, you know, you have Curtis Yarvin saying America should have a king.

Well, this is a common viewpoint that lots of people have, right? And they say things like, oh, you know, dictators can kind of, they don't need to negotiate. with people, they don't have political costs, they can just do all kinds of things if they're just very efficiently and they can direct big projects that make society better at scale, right? Now, one of, like,

there's lots of reasons why, yeah, you know, this is like, like I'm not pro dictator, obviously, right? And there's big downsides of dictators that I think more than outweigh dictators, right? Or that more than outweigh the benefits, but what's interesting is that the benefits of dictators are real,

but I think democratic capitalism has based, like you can think of it as actually being a way of like basically, yeah, kind of putting dictators in a box and getting their benefits without suffering their costs at the same time, right? What is a dictator in a box? It's an entrepreneur, right? You know, you have these big titans like, you know, Jensen Huang and, you know, the various AI people and whoever else.

And, you know, they're a, like they command. significant amounts of resources. And then they, as that layer of the stack, their goal is to kind of move around these large, you know, quantities of resources and these large objects and to try to produce outcomes. And, like, I mean, they do have to negotiate with people, but definitely much, much less

that if you try to allocate the same amount democratically. But at the same time, you know, you have this other layer of the social stack that's supposed, that that actually is, much more democratic, that's supposed to decide on these systems of rules and incentives where if Jensen Huang makes the world better, then he's able to get a lot more money and he is able to play the next round of the game with even more resources. Or if Jensen Kuan makes the world worse, then lower kind of case, he makes less money or, you know, maximally low case he goes to jail, right?

And basically, I mean, of course, I mean, this is something that has to be maintained carefully, right? And if you get into a world where like basically the entrepreneurs sort of escape the box and then they start like effectively writing their own incentives and like that whole model breaks and then effectively, you risk getting the downsides of, you know, the Curtis Yarvin world without the upsides, right? But like I think there is an analogy here to, I mean, L1s and L2 is are one of those examples. The, yeah. Even on the application layer, there's a lot of examples, right? And the analogy here is basically that a lot of the time these things are much more centralized than Ethereum. A lot of the time these things make UX tradeoffs that are kind of much more, you might say, normie favoring than the Ethereum 1. A lot of the time they care less about us. Cypherpunk values than Ethereum, but at the same time, if built correctly, you can have structures on the L1 whose job it is to hold them to account, right? And so one example of, like, the most

basic example is the proof system, right? Because the proof system prevents the L2 from claiming that something false is true, and it prevents the L2 from stealing people's money, right? Another example is like the bypass channel, right? This is the mechanism where if the L2 starts censoring you, then you as a user can, like, send your transaction, and then your transaction, like, is just forced to be included in a block, and then you're able to get your assets out, right? And, like, we actually saw, I think, interesting examples of these bypassed channels actually being used in real life, right? And another example is, like, this idea that I briefly mentioned, where if you have a centralized

sequencer, like, you could have a gadget on chain for switching the sequencer, right? if people vote that like, hey, we have off-chain evidence that the sequencer is like abusive in some, you know, like extractive MED front running sense or they're not responsive enough or whatever, then people can vote and then that vote needs to be censorship resistant, obviously, so what happens on 01 and so you replace the sequencer, right? And so this gets into the discussion of like what I think Ethereum strength is, right, that we are this ecosystem that has different actors. And so I think we, as Ethereum, like, we have to figure out, you know, like, what is this, this right set of incentives? And, I mean, I think as you guys said, right, I think like a strong L1 that's actually able to run all

of this machinery is a really important part of these incentives, right? Because if you don't have a strong L1, then effectively you're, you end up letting the entrepreneur out of the box, right? Like, you end up, like, for example, you know, you have a proof system that works in theory, but then like you start doing the fine print and you realize like actually there isn't enough space on the L1 for everyone to exit at the same time

and so like the whole thing is kind of a larp right and so you know like strong L1 is part of this right and basically you know the L1 like part of its role is to create these these boxes and like and then like actually

make things on the the full spectrum of like different types of you know like centralization tradeoffs and like rapid, like low latency, UX tradeoffs and all of those things actually accessible to users.

So that's kind of how, like that's what I think, Ethereum's my like answer to the, the question of where the slider should be, right? Like to me, Ethereum is the, this kind of sandbox where the, like,

it's supposed to let people build on as many positions on the slider as possible at the same time. And I think that's one of its most valuable traits. Yeah. Yeah, okay. I feel like I've taken the nation analogy in like probably a totally different direction from what you guys expected. But not at all. I mean, we can continue expanding. We love talking nation analogy for Ethereum. But one area maybe we could extend that is ether the asset. So all nations have their own currencies and some have World Reserve assets. And so, you know, the social error, let's call it in Ethereum, and part of Ethereum nationalism and kind of the way that I use it

is using ethy acid as kind of a shelling point. And so let's talk about a few concepts here. One question I have off the bat, though, is what do you make of these ETH treasury companies that are springing up, right? So you just had Tom Lee on the podcast. He says he wants to go acquire 5% of all ETH supply. All right?

So you have a hard time doing that without bidding the price up. What do you make of these vehicles? Are you think they're good? Do you think they're bad? Are you somewhat indifferent to them? Yeah. So I think on the first question, like the value of ETH, I mean, I think, like, ETH is the biggest thing that everyone in the Ethereum ecosystem is economically aligned on.

And so I think maintaining a strong role for ETH is importance just for that reason. Like if we had a world where, you know, the incentives of base and the incentives of bankless and the incentives of the EF like went off in three different directions with zero overlap. Like Ethereum would break as a community, right? And so, you know, I think that kind of core of, like that economic core that creates is something that is really important, right? And I mean, I also, you know, I have like many different theories of like where the value of

East that could come from. Like there are many days when I realize that like it's actually hard to outperform the theory that the set of price, the price of Eath is set by a cabal of 14 demons who live on the moons of Jupiter. And right. And like basically everything that we're doing is just a competitive game of who best gives. the demons on the moons of Jupiter the best show. But it's like even from that perspective, like actually, you know, making Ethereum a more relevant and a more central ecosystem to, you know, global applications and finance is still the right thing to do, right? So, you know, there's transaction fees, there's network effect arguments. And I think the best things that we do are things that are kind of supportive of Eath from all of those perspectives. the treasury company is

this kind of puzzles me sometimes because like to me I think of this as I mean first of all they're not operating with their own money right? They're primarily yeah like the point is that people buy into the treasury companies and the treasury companies use this in order to buy ETH and so they're effectively creating this kind of

interesting, leveraged financial product on top of that's like somewhere in between an option and a derivative. And, you know, there's squarely a lot of people who buy it and who value this kind of thing. Which one's your favorite? You don't have to answer about. Who's my favorite East Treasury Company? I mean, I guess, I mean, you know, the, the U.S. us government that keeps confiscating from hackers is kind of cool.

Let me maybe make the case for for for, for each treasury companies. And this is a case of moderation, okay? So there's obviously a world where eat treasury companies go too far. There's too much and it's custody and it's not bankless, all of these things. A case for them is that they act as a shelling point coordination mechanism for ethy acid itself and propagating that story into mainstream in some way. to a lesser extent, but in some ways the way Bitcoin has done that successfully. Now, you can always

go too far, over leveraged, like more in custody than you want, but it feels to me like in entering 2025 versus now, ETH is healthier in a place, and Ethereum is healthier with a strong ETH, when you have some of that activity and there's some representation of it in traditional finance. You get some of those capital inflows. What do we get from that more economic security and more economic bandwidth to go create the cyphor punk things we actually want. So at some level, in some moderation, we had 0%. Now we're at like 1% of ETH supply. Like this seems to have a good effect. That would be my case for why ETH treasuries equals good. Yeah. Yeah. I mean, I agree. And I think, yeah, like the social aspect of coordinating around ETH just being an asset that

companies can have as part of their treasury is good and valuable. And like giving, having different vehicles for people to have access to ETH, which is, I think, one of the reasons why, yeah, I mean, like people are buying into treasury companies instead of just huddling ETH directly is also good, right? Like, giving people more options is good. There's always people in all kinds of different financial circumstances that put all kinds of, like, requirements or incentives or properties on, like, what formats of things that they, yeah, participate in. And so, no, I think there's definitely, yeah, very valuable services that are being provided there. And yeah, like, if you woke me up three years from now and told me that, you know, Treasury has led to the downfall of Eath,

then, of course, my guess for why would basically be that somehow they turned into an over-leverage game. And then at some point, you know, like a 30% drop turned into force liquidations that turned into a 50% drop and then a 70 and 90% drop. And then that got compounded with a loss of credibility. But I mean, I think the people in Ethereum in general, you know, even including the people doing finance and Ethereum are responsible people. Like, you know, these are not Duke One followers that we're talking about. And so I think like, yeah, as long as, you know, like leverage doesn't go too high and these things, like, don't start getting into those kinds of mechanics. So like, Like, no, I mean, like derivatives of ETH existing are like a fundamentally fine and unstable thing.

So, you know, good for them. Zooming back out. You know, one of these ETH treasury companies, maybe two, will definitely be around in 10 years. I think that's kind of why people are excited as that these treasury companies can stand the test of time if they do things right. But I want to zoom back out and just talk about the next 10 years of Ethereum. So when Ethereum is 20 years old, and we hope to bring you back on the podcast in that time to talk about. We're going to be old, David. We're all going to be old.

But that's fine. But Ethereum will be young. Ethereum will be merely 20 years old. What, Vitalik, because Ethereum is an ongoing project. The job's never really done, I think. The job can become more done, but I don't think it'll ever be 100% done. So what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years? If the job's not done, what do you want done in the next 10 years for Ethereum?

Yeah. I think one is the technical roadmap, like, basically being at at least some kind of, like, you could call it finish line, you could call it maintenance mode. So, like, I think to me this includes one, ZK snarking everything, two, replacing any component that's not optimized with a component that is optimized. So, you know, replacing Kajak with Bacin or something better, replacing EVM with Risk 5 or something better at the very least as, you know, replacing Kajak with Bacin or something better, at the very least as. an option, making all verification happen through ZKSnarks, or it would have to be Starks, making every node ultra-light and verifying it, verifying, making privacy a defaults part of the experience, starting with payments and increasingly getting into, I think, more and more sophisticated forms of defyms. Also, some form of self-custody that is both

self-sovereignty and friendly to normal users. Like, I think it actually can be done, and I hope that we get there. Formal verification on everything. I mean, it would be lovely if we could have a formally verified, secure, open source chain all the way down from, you know, top levels of the stack like DAPS, and then you get into the Ethereum clients, and then you get even lower down to the operating system, and then ultimately to the hardware. I think that would be really cool.

then in terms of like impact on the world I think I mean finance happening on Ethereum by default would be yeah amazing like if we actually get to a world where the financial infrastructure is such an infrastructure that if a user wants to you know they actually can kind of open up developer mode and like take their assets out of one application and then start to use another out use other apps applications instead, be able to permissionless legal and connect different things, make sure that people have strong options for preserving privacy. I think being able to take their funds out of one wallet and move them into a different wallet and all of these things. I think that's all

really important in general, a future of computing. We're a trustless vision of security that is based on cryptography and verification of code being a societal default and us getting to the era where we are using things where we have a strong assurance that they are secure. And the era of trust me for security starts looking as archaic as the era of not cleaning our water looks looks to us today, I think that would be amazing. You know, we've already gotten there with HTTPS. I think we need to get there with it with everything else. And I think Ethereum can be a huge part of making that happen. Battalick, you wrote the white paper in 2013. You were still a teenager at the time. And so now maybe a personal question as we wrap this up. It has since

grown of the last 10 years into a network that hosts almost $1 trillion in assets. And it does seem like increasingly the entire world is building upon this world ledger. But over the next 10 years, what do you see as your role for Ethereum? Are you sticking around? Are you going to finish this vision? What does this look like for you? Yeah, I think continuing to do everything is needed in Ethereum is definitely a big part of it. I mean, I think over the last few years I have been and I expect I continue to be involved in some of these broader DEAC efforts. So, you know, we've talked about biodefense. We've, I think, before, like, security at some of the lower layers of the stack that we've

talked about, I think is also going to be important as well. So basically, you know, like making this kind of full stack, open, secure and trustworthy the world actually become a reality in in ways that include Ethereum and also include a lot of other things. I expect will be a big part of my focus over the next 10 years as well. I mean, I think it's basically, you know, it's the same goal that I've had all the way since, I mean, even joining Bitcoin back in 2011 and just excited that we can make it happen. So Vitalik, Bankless has been around for about half of Ethereum's lifespan, five out of the 10 years of the blockchain. Knowing Ryan and I were probably going to just keep on doing this.

Right, Ryan? Sure, David. Do you have any requests or guidance or advice for how Bankless should be with Ethereum for the next five to ten years? No, I think, you guys have definitely done a good job just to be inconsistent this whole time. and covering all of these really different and valuable parts of the Ethereum ecosystem. I think continuing to do that is important. I think also especially some of these, like there will definitely be a lot of newer things that need to be covered and supported, whether it's the things that are happening on the privacy side

or even some of this newer wave of Dow stuff that is coming. Or, I mean, potentially, yeah, even all of these various different ideas of making Ethereum into something more like an actual nation. So, no, and it's a big space and, I mean, I appreciate all of the work that you guys spend on covering it. Well, Vitalik, thanks for joining us today. Happy 10th birthday to Ethereum. That's a belated birthday, but we're, we're, still around that mark, and it's been great having you on. Thank you so much. It's been great

to be here, too. Thank you, guys. Gotta let you know, none of this has been financial advice. You guys know crypto's risky. You could lose what you put in, but we are headed west. This is still the frontier. It's not for everyone, but we're glad you're with us in the bankless journey. Thanks a lot.