Bankless - Everything you need to know about Solana | Santiago Santos & Konstantin Lomashuk

Episode Date: September 2, 2021

Solana is emerging as a competitive Layer 1 platform, promising scalability and a growing ecosystem. Join community thought leaders Santiago Santos and Konstantin Lomashuck as we assess the Solana Value Proposition. How important is decentralization? Why build on Solana? Can different L1's coexist? Does it seek to compete with mainnet Ethereum or Layer 2 scaling solutions? We've been hearing a lot about Solana lately. It's time to dive in. ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge  ------ BANKLESS SPONSOR TOOLS: GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini  BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer  AAVE | LEND & BORROW ASSETS https://bankless.cc/aave  UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap  ------ ⚽️ SoRare | Collect and Play! https://bankless.cc/SoRare  ------ Topics Covered: 0:00 Intro 8:00 Santiago and Konstantin 10:05 Why Bullish on Solana? 16:31 Solana is Optimizing 24:05 Decentralization 34:56 Running a Node 55:57 Skeptical ETH Maxi Hat 1:04:40 Initial Sale 1:12:32 Valuing SOL 1:19:08 Developer Activity 1:24:11 Can We Be Friends?   ------ Resources Santiago on Twitter: https://twitter.com/santiagoroel?s=20  Konstantin on Twitter: https://twitter.com/Lomashuk?s=20  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation. We are excited to bring you another bankless panel. This one is all about Solana, Solana, a layer one blockchain. Some have people have called it an Heath Killer, maybe an Heath competitor, maybe it's an Heath companion. David and I realized we wanted to learn a bit more about Solana and the ecosystem and to have a panel where we could have a fairly neutral conversation about Salana to dig in deeper. So that's what we're doing today. We've brought to you. We've brought two fantastic guests, which I think can represent a bull case for a Salana perspective in a kind of an incredibly neutral way. So know these two guests are very passionate about defy, know they care about values that the bankless nation cares about. That's why we wanted to bring them both on.

David, do you want to tease who the guests are? And then maybe we can give a quick tease of what this panel is going to cover and our positions going into this panel. Yeah, sure. So we brought on Santiago Santos, who is a big, Ethereum bull and is also bullish on Solana. And so for somebody that I resonate with their bullishness on Ethereum, I would like to know why, like, what are the rationales behind the bullishness on Solana? And so we're bringing on Santiago just for that angle. And then we also have Constantine Lumushuk, who has worked many different projects around

the world, around the crypto ecosystem, part of the Lido team, has experience with validating systems, proof of stake systems. blockchain systems. So he will be useful to talk about the nature of the technical details of Solana and is also bullish on Solana. And so I have detailed questions about that. And then I also, I think we also have to ask, you know, kind of more or less the same questions that all blockchains have to ask themselves, the nature of the token distribution, the nature of who gets to validate and just the why it is a, what did it unlock, right? So from what I've been able to gather. Salana is a pretty cool piece of software from the people who are more technically

competent than me. They have good things to say about the software that is Solana, and so I want to dive into that as well. Yeah, absolutely. I think we probably both of us have a particular thesis coming into this conversation, right? One that we've held for a while. So, you know, first of all, the vision when we started bankless was we want a self-sovereign bankless money system for the world, the most decentralized system possible. We saw, that in Bitcoin. We saw that in Ethereum. We see that in DeFi. And we've always had an open mind to like what is coming next. I will say I probably have a preconception going into this conversation. And that is this. Solana, as David mentioned, is a cool piece of technology. They're a real project.

There's a real team behind this. There's some fantastic engineering talent. They have a real community. I see backing from some interesting funds, FTX, and other crypto banks as well. So I see some traction. So it felt time to have a conversation about it. Other layer ones like haven't reached even even this stage where it's worth spending a lot of time on, at least for me. But David and I thought it was time to have a conversation about Solana. I will say my current perspective on Solana is that I I believe it might be a bit too decentralized or to be a global world settlement layer for defy. Things I'm going to ask and I'm concerned about, the ability to run a node from home is

very important. The ability to kind of verify transactions and opt into the system. There's some issues with state growth that seem unresolved. Some questions around the supply of the token. This got a start in sort of VC land in a presale that wasn't publicly available. a relatively small group of folks who have been distributed the token, at least in the early stages. Some of that may be decentralized. I think ultimately I've concerns about the number of validators that it takes and the number of colluding parties that it takes to kind of co-opt the

network, censor it, roll back the chain, these sorts of things. I feel like my take coming into this conversation. And the reason I'm sort of spending some time to illustrate this is because it's important. You get a sense for the questions David and I are asking. It feels to me like Solana is a fine platform for lower value settlement. Maybe things like NFTs are great for it, maybe other low value use cases. But I don't think it's decentralized enough to be the bankless, defy settlement layer that we want from this space. at least, that's my thesis going in. And I'm open to the conversation around this, open to change my mind. But all of this might mean it doesn't actually compete against Ethereum.

It's actually a companion to Ethereum in the same way other side chains are, other layer twos are, even centralized exchanges help propagate. And they do settlement on Ethereum too. So ultimately, I do want to echo the sentiment that this is not a zero-sum game. like we're all in this together. I do think that Salon is actually good for Ethereum. So the Heath Killer versus Ethereum thing is somewhat of a myth. But we do need to get to the bottom and have a conversation about the tradeoffs of various systems. And particularly the layer one that we select for this industry as kind of the shelling point for all defy,

we need to make sure it is as decentralized as possible. So I'm probably going to be asking these panelists some questions. along those lines. I don't know, David, if you have anything to add, that's a longer preamble than you usually give from these panels. But yeah, I felt it was important. All right. So let's go ahead and get into the takes from our guests. And so, but before we get there, we must talk about some of these fantastic sponsors that make the show possible. When you shop for plane tickets, you probably use kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure that

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We have two guests for you. Really excited to introduce them to you. The first is Santiago Santos. He is a crypto investor. He spends most of his time at the intersection of Defi and the Metaverse. He has a crypto punk, of course, number 9159. He's a former partner at Parified Longtime Investor in the space. Also, a repeat bankless guest, Santiago.

Thanks for joining us today. Great. Thanks, Ryan. Thanks, David. It's great to be here again. We also have Constantine Lomashuk, who is an investor in the Ethereum crowd sale. and also a Solana seed investor. So both of those networks at the same time

has watched them grow from little seedlings to what they are now. So I think offers a fantastic perspective. Also a validator in the space, co-founder of the P2P.org project and also Lido, he is a Unisox holder. Need to mention that. We've got to pump our NFTs whenever possible, right, guys?

Constantine, welcome to the show. It's great to have you. Hi, guys. All right, fantastic. Well, we are going to get into the panel with, I think, the first question, which sort of sets the basis for all others, which is what makes you bullish about Solana? Santiago, maybe to start with you. Yeah, look, a minute. I think it was interesting.

I think generally when you're investing in this space, you have to keep an open mind of how things are evolving. I think protocols are organisms that expand and grow and Bitcoin. I saw Bitcoin early on and Ethereum early on as well. And like they've taken a shape of their own and they've grown. in a very meaningful way. I think what drew me to Solana was a couple of things, but I think this idea that the number of developers that were entering the space,

not just like solidity deaths going to Solana, but it was more like new talent entering the space. And I think that was large part, the gravitas that Sam FTX and that consortium has. They have a lot of muscle and resources to attract new developers, which I think isn't that positive? to the space. When I say the space, I think like, you know, Ethereum, Bitcoin, just broadly

kind of crypto. And to me, it was really encouraging. I was a judge and a few of the hackathons and the number of developers entering the space was improving and talking to these developers. The thing that I focused on the most is how easy is it to build in Svalon? And I think the dev tooling and resources have come a long, long way since they launched, what is it, a year and a change ago, a year and a half ago, a year and nine months ago. So I think to me that has been most encouraging. It's sort of like follow the devs and why they're building in Solana and understanding that led me to to become more interested in the space. And also, I think you alluded to this in the preamble, which is, well, there are certain things that I think like certain blockchains is my view that are application-specific blockchains. You know, like a blockchain doesn't need to do everything.

I think we're in this mindset that we think of the internet as this one, you know, like just the internet, right? But I think blockchain might be different where they might lend themselves to this tradeoff that you're making the security and centralization and faster throughput and settlement and execution and lower costs. And so I think ultimately, I think to me, this is a growing desire to see more different use cases be explored, whether it be social or NFTs or stuff that, you know, if you're if you're settling, you know, a million plus dollars, well, you're going to value security a lot. But, you know, there are certain applications that might not require, and especially the user might not even appreciate decentralization security. So ultimately, I think it's net positive, as you said, and to me that was most interesting and have been for a while now supporting and just observing what's happening on the DFI side of things and also the NFT and a metaverse side of things.

But I'll pause there. We definitely want to get back to the conversation around the use cases for Salon and how that might be distinct from Ethereum or similar to Ethereum when we talk about the apps. But let me throw the same question to Constantine now. So, Constantine, you were there from the very beginning, both of Ethereum and also of Solana. So tell us what made you bullish on Solana in the early days? And then what makes you bullish now? Yeah, you know, my answer is pretty simple.

It has a different vision on scaling. And it's not bad. It's good. you know, like if we do only, I mean the same things, it is a better for ecosystem. We should try a different one and compete with each other. It will bring, you know, like a better product for final users. And before we start this discussion, I'm also want to say that I'm a big believer in Ethereum success, you know, like, and have, you know, like much more Ethereum that I bought on, for

example, in Croix's crowd sale. And so I'm not going in this conversation, try to sell Salano. My goal is, you know, like to show that Salana and Ethereum are good friends and they can coexist together. And together we can achieve like the goal of decentralization and censorship resistance faster and like to bring more value, I mean to everybody. Then if we compete attack and try, you know, like to compete with each other. And also, I mean, in 2014, you know, like I did a report about all blockchains and this valuation with more than $100,000. It was about 100 of them. And we split them already in 2014 on proof of stake and proof of work. And what we tried to understand what is the difference between all of

them. And what we saw, we saw even in 2014 already a lot of Bitcoin maximalists. You know, they still exist. You can see them. Now we have a lot of also. so Ethereum Maximalist, I don't try to say that it's bad. It's also good that we love the products that we build. But what I try to say is that, I mean, we need to look deep more. We need to make more critic not only to competitor, but also to products that we love and push to make them better. So back to the question, in 2018, when it was the beginning of crypto, the beginning of

crypto-winter, so nobody wanted to allocate capital to new products. especially to layer one. And I had a conversation with Anatoly where he told me like a lot of different things. You know, I didn't catch everything because he's more technical than I am. But one thing that I catch, it was like that he wants to build the blockchain that scale with the speed of technology. You know, like, and it is a little bit different thesis that we have in this theorem. For example, when you want to like make more like transaction, for example, when you want to build. build more scalable solution.

And if it is new hardware exists, you can make more transaction per second. And in this different vision, you know, I'll allocate my capital because I think, I don't know what the vision is, I mean, what is better finally, what will win, what ecosystem will win. I will happy that all this ecosystem co-exist and will find own like place on the market. and this is my goal. That's what I tried to do from 2018. I run the validator.

I run this nodes. I help, you know, to make it censorship resistant and centralized. Yeah, this is my answer. David, you're muted. Fantastic, Constantine. I appreciate that perspective. And both of you got your, both of your guys' answers had some sort of allusion to. So, Solana being a meaningfully different innovation than just,

what would be just a fork of geth, right? And I think the reason why, like, where we are doing a Solana panel rather than, like, a Binance smart chain panel or an avalanche panel is that both of those things are just forks of death, right? Like, and that's not really true innovation in my mind. And ultimately it's, talking about the EVM,

is ultimately just talking about Ethereum with extra steps. Solana is not that. Solana is its own thing. It's bringing its own innovations to the table. And so my question to you guys is, what is Solana optimized for as a result of its new package of software, right? And do the, do what, if a Solana is optimized for something, is it optimized for something that is similar to Ethereum and what Ethereum is optimized for?

Or is it something different? Santiago, let's start with you. I was going to say, Constantine, if you wanted to go first, but sure, I'll jump. I think, you know, I ultimately don't, my view is that Solana, perhaps takes, like every network, I think, through utility, decentralizes. So Bitcoin and Ethereum were decentralized, I think, initially as well. To Constantine's point, I mean, I spoke to Anatolian, he worked at Qualcomm, I believe, and so has this sort of view of how networks scaled in the early days of the Internet.

And I think there's sort of these sequential waves where, you know, you have this technology, No one really cares about it. Then it gets a lot of traction. And it pushes, right, the limit of a server of network. And then you have sequential waves of innovation. But there's this sort of gap where there's more demand what the network can support. And I think that experience from Anatoli coming from the network side of things is interesting.

Ultimately, I think both Ethereum and Solana are designed to be just generalized. And I don't think they have a particular, like, vertical in mind. And now I think, as I think of it, I mean, I'm skewed, right? Because I like Defi, but I've also become more interested in NFTs in the Metaverse. And back to my original statement, you know, I think Solana is more, this is my view. I don't know why it was it, if there's, if this is true of its design. But I think that at least for now, you are more likely to see applications that require less security, both from, especially on the user side of things, and can scale.

more easily. And I think those are naturally things that have been trying to Ethereum but haven't gotten that much traction or have gotten reasonable traction. But I think you're seeing a lot of like, I think, I think you're seeing over a million active users in Salon. A number of transactions per user is like two, three times higher than Ethereum. Why? Because I think it's just cheaper, right?

And so all that's telling me is that social NFTs, gaming applications at the moment of where the network is in terms of its security. in concentration of validators, if you look at the like Nakamoto consensus, I think is more well suited for those types of applications. Now, over time, that's not to say that like defy applications, for instance,

cannot, I mean, there's certainly like mango and a very thriving defy ecosystem that is being built, a lot of which has been, hey, what's worked in Ethereum? Let's pour it over to Sala and build that, right?

I think defy is like a core backbone than any, any, I think most layer one blockchains are now realizing, hey, look, wow, defy is really the killer use case, at least in Ethereum. let's port that over and have all these yield incentives to attract users. My view that perhaps we should discuss at some point is this idea that

D5 protocols, when you're securing that type of value, you know, like I think TVL in Salon is actually quite small at the month, it's like $3 billion or so. And Ethereum, it's like 40 or something or much, much more. And the question is, can you actually get there? and will institutions and funds get comfortable, like, meaningfully staking value in the Solana ecosystem? And I don't know. It's sort of like, I think it's still TBD. My view is that it might take a little bit more time to, like, battle test this network.

But it's not to say that it can't get there. So long with an answer is saying, I think at the moment, you're in this curve of security decentralization where applications that require less security. are probably, and are more like computation intensive, we're going to get more traction. But, but yeah, I'll pause there. But, David, you're muted again. Thank you.

Constantine, same question to you. Since Solana is a new suite of, you know, software, is a new collection of softwares. How is that software collection like optimized for differently or similar to what we see on Ethereum? You know, I think like whole blockchain tried to like, like optimized to, I mean, from one side, security, from other side, scalability, from the other side decentralization. And I said that, like, it's a lot of critique to everyone, still to

Ethereum, for example, I mean, launch of Bitcoin chain, from one side is security, but, like, it's give a lot of chance for exchanges to be like the leaders in the Prophal State, for example. these are also like I mean for example so and I think like Ethereum tried to be secure first you know and they're decentralized and then like scalable you know like by different other and to move not so fast and Salana doesn't have you know like this option to move so so slow I mean like so in a so secure way they take a lot of more risk because you know like to I mean Ethereum is an almost number one blockchain for, I don't know how much for years. I mean, if you don't like look on Bitcoin, for example.

And Salana only launched in 2018, you know, and to build a system, to bring developers, to do all these things, to build the product is really difficult. And it's not easy. That's why, you know, like when somebody like, like, would make a lot of critique to any products, I send them to build something, you know. And I think, of course, Salana, from one side, they want to be censorship resistance. And are they doing a lot of work? I can say yes. They've bring so many validators. They spend so many funds on top of it. They spend more time on, like, validators than maybe any other blockchains. Maybe like Zach did a good work in Cosmos. Of course,

it is like some issues with that. But like Salana did a great work in, I mean, Salana to build like this validated community. And it's not a lot of other blockchains that gives this example. But I think the main goal of, I mean, like Salana is give you scalability. It's still thinking about security and about decentralization. But the main goal to run like an application that can be composable with other application and has one billion users.

Is it a complex task? Yes, it is. Is it like a lot of different way how to build such blockchain? Yes, it is. And this is like just different approach. So I'm curious about your model for things, guys. So when I think in my head about like decentralization, right, and trustlessness, first of all, it's very hard to pin down and define, right?

But it's very clear there's also like a spectrum of trustlessness, right? And decentralization. And so let's say you have on the far left of, you know, most decentralized smart contract chain out there, we put Ethereum, right? And then on the far right, you might have, you could call something like Coinbase, for example, or Binance, or something that settles to other public chains of themselves, right? They're kind of like a single validator, I guess, ledgers, if you will, that settle on top of this open ecosystem. of chains. And then if you move a little bit further right, you might get like side chains, for instance, with some sort of, you know, delegated proof of stake. You might have like cosmos. You might have, you know, polygon in its, in its current form. And then maybe somewhere in between,

I, you know, I can't quite make up my mind. You have like a salana, which is possibly a bit more decentralized than a delegated proof of stake sort of, you know, tendermint based chain, like something in the cosmos ecosystem, something like Terra or not. And what I, first of all, I'm curious if this is kind of your mental model. And also like what one, I guess, a thing I forgot to mention is we also have layer two, which is essentially, I would say, further left, closer to Ethereum because, well, it has some cryptographic and economic sort of additional trust requirements, it's still using the Ethereum network ultimately for its economic security and its full security.

So it's kind of like, A, is this the model, is this how you model the world in your mind? And then like B, how much decentralization is enough for something like defy? And Santiago, I'm curious your take on this first. I think your mapping is relatively how I think of it as well. And jumping directly to the question around DFI is, look, I mean, I think Anatoly, sorry, Constantine alluded to this earlier. I think if you, Anatoly, I've heard him say a number of times. There is an implicit belief and assumption in sort of this Moore's Law concept that the cost of running validators, Lana, will go down pretty dramatically over time, which will allow for more, I guess, diversity. of the validator set.

And because right now there's what, 900 coming up to 1000. And but it's still relatively expensive, I think, to run a node. And Constantine, you, you can collaborate, correct me if I'm wrong. But, and so it begs the question, right? When you think about security, I think of security is what is the economic cost to attack this chain? Okay. And I think the Simplistically you would say, okay,

I think you need like a third or whatever to a third or two thirds, I guess like to, for valid to glued and then like, you know, roll back the chain or like attack the network, fine. But I think when it comes to defy, so I think defy protocols, it's an interesting dynamic where my theory is, okay, so if you're a defy protocol,

you have a lot of these assets, you have your own token, right? And then you have all these users, right, that are using your protocol, you're maybe an AMM or a money market. Then I think when you have the choice of which validators to use or like, I think it's sort of like increases, I think, the cost of the attack because like, you know, there are these stewards, I guess, of capital in the system that are, that are going to choose, I think, the validators.

So like it's not as, like we think in theoretical terms, I think, okay, what would happen if some were to buy all this equipment and then try to attack the network? But the reality is there is some choice in that, I think, process where D5 becomes an interesting, I think, mitigator to simply simply just saying, oh, it's going to cost X to, like, get X percent half rate or X percent of the validator set and just, like, collude and try to attack the network, I think is my theory, but I'll let Constantine jump in. Yeah, what do you think, Constantine? So, you know, same question.

Is this the model that you see, the spectrum of decentralization, and how much decentralization is enough for defy? You know, it's a complex question. I mean, I can't measure like this decentralization of Solana on this spectrum. And we even don't have a lot of data to do it. I mean, if you look on, for example, Ethereum validator set, how we can calculate how many real validators are running the network. We can't, you know, like I'm running the network.

I don't know how. And by that you mean like individual people? Individual. Like companies, like individuals, like some other parties, you know. How many professional validators are running in Ethereum, you know? And the amount is really low. Why? Because Ethereum didn't have delegation.

And as a light of it, we tried to find this professional validators. and bring them to validator set. Is it any one, please outreach us? We will be happy to give you like some steak. But I mean, and in case of Salana, it is also like they have now like, for example, 900, 980 like validators in validator set. But is it all real people? I mean, it is difficult to understand.

It's different to like measure. What is, you know, like, I mean, what is there really censorship resistance? Is it like 1,000 validators? Is it 10,000 validators? And when I speak with these guys, for example, with Anatoly or like with Dancred from Ethereum, you know, they all pushing us, they say, we need 10,000 validators, you know. But is it economic enough to pay everyone like for the running of validation? Is it possible to run individual, I mean, a validator by individual?

Is it, you know, like slashing condition? So it is, you know, like really complex thing. And to, you know, like, and it is a lot of things how we should measure it. And there could have more metrics. And now we don't have. So, you know, like, I even can't like say, like, is it like Ethereum proof of stake network? Is like, for example, two times or like how much decentralized? I can't measure it, you know.

If I could ask a question to Constantine, because, you know, I've been involved in Lido, and I think Lido has seen impressive growth, but there is this idea of how much should Lido be, like, what percentage of the network should Lido have, right? Because the theorem is transitioning to group of state. And it's a, I'd be curious because it, you, when you talk about this mapping, Ryan, or we think about decentralization, group of state concept is how much is too much. Because Lido has gone incredible traction. But maybe if you can talk about that constant, because like, I think like it forces to think about like, I think, like, it forces to think about, like, I think. and so on in the context of, okay, LID is getting all this fraction. You're approving some validator sets, right, and new validators into the Lido trusted ecosystem, if you will. So I think that acts as a

mitigator, right? Because you know these people, you know, these operators in some capacity, you know, there is always some sort of social trust in any of these networks. Now, it's not realistic to assume that you're going to, you know, in a world where there's like 10,000 validates, you're not going to know all of them, right? And it's sort of this permission, in the system that anyone can just spin up, right, their own infrastructure. And so the question is, to you, Constanino's Lido expands it to Solana, like, would you say that, like, okay, it's a fairly, like, limited validator set today. But if you're a DFI protocol or if you're a big sole holder, and you're going to choose

which validator, then you're going to have to, like, do some due diligence. You're going to have to vet that, right? If you're a D5 protocol and you're holding all these soul and tokens, well, like, I think that's ultimately, like we forget, but I think blockchings are social constructs of coordination. Like there is always an element of, hey, I trust Constantine because he's been running validator nodes forever. And I know his, like, I know his slashing rate. I know that he's super competent operator. And there is an element that I know him. And I know he probably has an incentive not to attack the network or be corrupted. But, but that's just my sort of perspective.

Yeah, you know, like we are at P2P2. We are running notes like for many years. And you know, like, it's how people choose validators. They can't understand. It's more marketing, you know, like all sales. It's like, I mean, users, even the funds, they don't think really a lot on security. And this is an issue. And that's why products like LIDO can solve this problem.

Because what is the goal of LIDAR is to make happy Ethereum holders, is to extract, for example, MED to its holders, is to keep network decentralized, is to choose, like, best validators. And the more competition between such actors, like Lider, then more they will bring validators. For example, when I'm speaking with Anatoly and say, oh, we're going to, like, Lido want to launch us on Salana.

And he said, oh, we need 10,000 validators, you know. And I say, how? You know, like, what should I do? It's impossible. And he said, let's do it, you know, let's find the way. We will find some, like, grants, some other things. And it's complex. It's complex things.

And what I try to say is that, you know, like to make this network decentralized, you are like bankless, what bankless is doing, you should push people to, like, to go to Leida, to go to Ethereum Foundation, to go to other parties and push them like to make this network decentralized. It should be more political discussion of stakeholders to push, I mean, to decentralization. Back to the question of Salana. know, like, I mean, it has like 980 validators. But I mean, like, it's more maybe decentralized than like 10 validators of 100 validators. And I mean, we still don't know how the biggest,

like, decentralized network has, how many validators it has. But I mean, amount of validators, it's only part of decentralization. Also, it depends how, like, it's construct, architecture of this blockchain and all other questions. There are so many factors that make up decentralization, including like even token distribution, which we could talk about. Let me maybe throw out kind of some of my experience. So Constantine, I used to actually have a validating entity, validating company, did some work with Cosmos, was on the early Cosmos test net.

And one of the things that was interesting from an, you know, observer's perspective of being a validator was, you know, Cosmos had an ICO, so it had some distribution. But what would seem to happen post the launch of the Cosmos Hub is that a lot of the state kind of collected in the hands of Wales and a relatively small number of validators. So nominally, there'd be like 100 validators, right? But like a good portion of the network, they were all in the same disc, we're all in the same channels. We knew one another.

a lot of the actual validators were former employees of like tendermint and and Cosmos. And it just, it just felt very. And of course, it had governance, on-chain vote governance. And it felt very centralized. And I don't actually fault the Cosmos ecosystem for that, right? It's using it's kind of, you know, delegated proof of stake type model. And to be fair, its vision is actually not to have a single chain that rules them all. it's to have this massive ecosystem of self-sovereign chains in city-states, right?

But this is kind of where I'm coming from when I look at Solana, right? So we have generally a closed sale, VC sale. You had to be an accredited investor to get the tokens, dominated by a bunch of VCs, but also validators, who got in early on the Solana launch, right? And many of these validators know one another. I've heard that, you know, 18 validators or so have 33% of the network. Like, it's a relatively small group of people.

But what it doesn't have, and what I think Ethereum does have, is the ability to actually run a node at home, right? Like on my Comcast internet connection, I want the ability, not to run a validator necessarily that I want that ability, but also to run a non-validating node on Ethereum. and just make sure that I'm not getting a bunch of garbage injected in by a cluding group of validators. So to me, that's what's kind of different is it's coming from that perspective, it feels like you had a more centralized launch than something like Ethereum. You have a small group of validators who become kind of the, you know, almost like the early banks, right?

This is like they control sort of the ledger. It's a smaller consortium, smaller group of people. And then the average user doesn't necessarily have the ability to run their own node to clinch it off. And so what Santiago, you were saying earlier about, hey, some of this stuff decentralizedes over time. Actually, I partially agree because I think token distribution decentralizes over time. But when you construct a network that requires such massive, like, bandwidth and like, you know, state growth, is a problem. It's a problem for Ethereum, for instance, right? I worry that Ethereum is going to become more centralized over time, because state, like, state growth issues remain unresolved. So I'm curious your perspective on some of this. Maybe we'll just start with, like, the ability to run a node at home. How important is this for the decentralization of the network at Constantine? Yeah. So, you know, like you tell so many questions, and that I even try.

I remember your product, you know, like back in Cosmosica System. You had like a beautiful website. These are good for big fishes, you know, like I remember this. This is like mythos, right? Yeah, exactly. Yeah, I was running notes too. Yeah, there you go. Yeah, so I and you were one of the first who, you know,

start to work in Cosmos EcoSacis System, made a website, I mean, before everyone else, and start to all reach people, you know. and I saw on your website try to copy some like pieces and try to do the same. And I am agree with you that like Cosmos ecosystem, for example, I don't remember how token holders they have. For example, 3,000, yes? But I mean, the distribution was, I mean, pretty centralized. But, you know, I am agree with the opinion that there's more utilities than better distribution. If we look back in Ethereum, it was only 10,000 people who participated.

in crowd sale. For example, I participated two times. So maybe like it was, I don't know how much. I am I actually a couple of transactions. Yes, but I try to say that it's difficult to understand the real, I mean, like decentralization of state. But we know that Ethereum has like traction. It has a lot of users and redistribution happened during this time. People sold tokens or like something happened. The same I think is here. Then more, like a utility for the network, then more network will be decentralized in long term. And also about the running like the equipment at home, I ask my team, you know, like DevOps team, how much that's equipment, I mean, is the price of this equipment.

It can be like the prices, it will be like from 5 to 20,000, like for the one setup. And you can run it at home. For now, I mean, it's not so many transactions in Salana. when the state will grow, when they're like, I mean, amount of transaction will grow. You need more, for example, like video cards, but still the same with mining. You have, like, I don't know, small, like container or some of these, like, a lot of different mining equipment. So can you, like, run it at home? I think yes.

The question is, like, would be, like, the best, like, performed note, I don't think, because you need to have a team around. it. I mean, but if you add DevOps, you can buy it. And also, you know, like, this equipment is cheaper and cheaper like every like two years, the price is going down. So that's why, you know, like if you speak about YouTube in 2000, everybody tells you that, I mean, it's impossible to, that somebody will, for example, have a YouTube and nobody will, would invest in our YouTube in 2000. The same with Zoom or Skype, for example, Anderson and Horowitz, you know, when they start to work on browser, one of the first idea was to make, like, calls between each other, but it wasn't possible. And what I tried to say is that, you know, like, I mean, the price of hardware will drop down. And for example, you already like on, I think, like, on PlayStation has one petabyte of, like, yes, SSD.

and you have some other like metrics. So in my point of view, if you want to run a node, you need to have some delegation in stake, and you can do it in Salana too. And also... Yeah, from a practical perspective, I'm just curious, because I do think this is a fundamental tradeoff

that Salana makes, right? So, like, we can run an ETHU validator, and we do on a Raspberry Pi at home, home internet connection, basically, right? you know, solutions like Rocket Pool do things like, you know, decentralized. I know Lido is moving to a more decentralized model two, but the average user can run it at home. I couldn't do that necessarily with my Cosmos validator note. I mean, that did require a bit more DevOps, but it was possible, maybe, right?

Solana, I worry that like from a practical perspective, maybe like a hypothetical, yeah, somebody, one guy could figure out the DevOps and run this thing from home. He's got super high speed internet. But it's not part of the culture. And maybe that's a tradeoff that is made. It's basically like, hey, we're going to have lots of validating nodes and other nodes throughout the world. They're all going to be on AWS and they're all going to be in data centers in various locations. And that's okay.

That's the point at which Solana is on the spectrum of decentralization. but it has not prioritized the ability to like, for a regular person to run a node and read right to the Ethereum chain. Is this kind of a fundamental tradeoff? Because this is part of the challenge. When I have Salon discussions with people, I always feel like we can't get to like the bottom line of, okay, there are some tradeoffs that are being made between Ethereum and Salon. It's like, what are they?

If this is one, cool, I understand. Now we understand the tradeoff. Now we can have an argument of whether that's good or not. But is that the trade-off, do you think, Constantine, the inability to run a node as an individual user? Yeah, Ryan, how many your friends, you know a lot of people in Ethereum community? And maybe, like, it's a critic, you know, but we need to, like, speak more openly about it. How many of them are running an Ethereum node, really?

I mean, validation no. And, for example, I would be really, because of the slashing, because of the other risk, I would really, I mean, worry to run it by myself because I'm not so technical. I can't run it. I would use the special software than can, you know, like, damage my note. And I would be not really sure that it will work in a way, in a secure way. So how many people do you know, like, who is running an Ethereum note at home? I think the answer to that question misses the point.

And it's not the wrong point, but the, the, the, the, the opposite. to run a node is extremely important. Yeah, yeah, yeah. And so you can run like Salana Note at home, I think. I don't see like, I mean, I know people as the most people. They have like VPN inside at home, you know, like they have like a service at home. And they're running VPNs and some other things. Is it possible right now?

I think it is. But what you need to be like to do some research, to spend some time. And you will stop it, I see it at home. Santiago, what's your taking on all this so far? I think, yeah, like, look, I think the Salana Foundation would tell you it is hard to run a node today. It is. It's just more expensive. It requires more technical expertise.

The hope is that, and Anatoli says it's a technological problem, not a computer science problem. It's an engineer problem, not a computer. I've heard him say this number. time. And I think he's right. I mean, ultimately, you are banking on this idea, like our wevis, for instance, the cost of running a node will collapse every time. This sort of Moore's Law construct of, hey, it's going to become cheaper, easier, you're going to obstruct away some of the complexity for anyone to run a node. And maybe that's what opens up a lot of these use cases that we talk about, where it really, you know, as I said earlier, it might just open up and

Salana can become, Visa might choose to settle USC on Salon, but it chose Ethereum. So is it too late at that point? Maybe, maybe not. I don't know. But I do agree, like, from a design perspective at this moment in time, I think we can all agree that it's harder to run a note on Salana. And I think the Solana team will tell you, yes, and they're focused on that. And that's the challenge, right?

So then I think it moves on to the second part of the. question, I think Constancy was alluding to is, then social trust and diligence becomes very important. The social layer of these networks and the culture becomes more and more important, I think, earlier on. Earlier in the stage, I think there's a transition of trust and sort of security and decentralization. Right now, I would say there is a lot of trust in Solana, that you need to be trusting these validators that, as you say, Ryan, I don't know perfect, but if they all potentially could collude. Well, I think, like, Just to pose another question is like how much you trust in fear off and Joe Lubin and the consensus team.

And, you know, there is concentration. There will always be concentration. The same with it. Like, if you look at political systems, like, it is unrealistic to assume that everyone is going to run node in their home. It's just, like, agree on that because it's not going to happen, I think. We can probably make it easier for people and try to layer in some incentives. But I think people ultimately just delegate and want to to use trusted delegators. And as Constantine was saying, there needs to be more talk and more discussion across networks, not just Solana, but also in Ethereum. And also we talked about Bitcoin.

Where's hash rate? It's all in China, right? Well, let's talk about that. And let's figure out ways to mitigate that, not like brush over these things. And I think it becomes important to do, for instance, tooling and educational resources say, hey, this is the track record of this validator. And this is where it's based. These are the people.

Maybe there are a blue check mark that says these are whatever, someone's like validating or like attesting to the legitimacy of this validator or something like that, right? Ryan, if you're running, a mythos, well, hey, like someone can vouch for you. And then there's an implicit social layer, I think, on top of this consensus that creates, I mean, this is sort of the idea of slashing, right? but you can potentially maybe include a reputation layer built on top of that that becomes interesting because I don't think you solve it as easily for any network.

I think there will always be a gravitational pull towards some concentration. The question is how hard. I think in Salon, it's easier to go towards that extreme that you're talking about, Ryan, where it's just by design at the moment, it's easier to go to a state where it can become uncomfortable for financial institutions and large people to sell. value, like meaningful value in this network. This is, this is kind of, this is kind of what I, like, what I worry about.

And like back to, back to David's point, just because people, lots, many people don't run nodes at home, you know, it's kind of like, I mean, many people don't vote in their democratic elections, right? Particularly their local ones, right? And so should we say at the protocol level, well, hey, we only get like 25% shown up to these elections. let's just stop elections, be way more efficient if we just had some, you know, central leaders who could make the decision in this jurisdiction in this area. It's like, well, no, because it's

important to have the option to vote in these elections. And I think that's important for the most decentralized base layer, settlement layer, defy protocol to preserve. I think Ethereum preserves that. And that's kind of my question about Salana. Maybe this is why I would say, like, I think we're all on the same page that Solana plus Ethereum is like pie expanding and is great for the space. It's great for Ethereum. It's also great for Solana. So like I don't ever want to couch it as a like this versus that. But I do want to fight and make sure we preserve these values of decentralization that the entire crypto movement is based on, the ability to opt out of the existing system. I don't want to have us at the protocol layer, the deepest layer of

this whole financial stack, some kind of a centralized lock-in. And maybe to Constantine's point, hey, it's like, look, man, this is all going to centralize anyway, and people aren't going to run raspberry pies through their home. And like, if that's the case, then man, you know, that would be sad. We will have lost something in crypto. And then I kind of go existentially. I'm like, what the hell was the point of the whole thing? You know?

And so, yeah, I mean, the users get about decentralization. No, but okay, like, let me offer you other data points on the networks that I was running validated suit. So like, Tezo, for instance, if you were one of the early bakers, which is the validators, you were gone. Like, to your point, if you were in top three, like, you would, it was more at that point of marketing effort and BD. And it was practically impossible because I would be offering like 10%, 5% like take rate on the reward. And you got to go find whales, don't you? I mean, I played this. Exactly. It was, it was an incredibly hard to convince people to undelegate and redelegate. And they were paying 40% to a validator. It is wild. And I said economically, rationally speaking, you would say

these people would switch. And they didn't, right? It's hard, right? People are lazy or what, or what have you? When it comes to money, you rarely switch your bank account. And I think that dynamic for me, Tezos was interesting to observe. Now, of course, you could undelegate and you, I think that kept like the validators honest and what they were voting for. And you could, you know, there was a process to undelegate and a cycle and what have you. And so, okay, that's fine. The optionality is super important, right? I definitely agree.

But look at Cosmos, too. I mean, you have to have a certain amount of delegated atoms to even be a validated. Now, like to your point, a lot of that was an early advantage from a lot of employees from tenderment who cleaned up. I mean, it was just easy for them to do that, right? It was an unfair advantage. I didn't like that. I didn't agree with that.

So I said, you know what, I don't believe in that. Even though tendermint as a protocol, I think, is. pretty interesting. But I didn't like that dynamic of the validator set. And I thought it's a big kind of, it's a challenge, I think, for a newcomer, at least in some of these systems, to get reasonable validation. This is difficult. So it's also a sales effort and a beedy effort. I think Terra is doing something interesting, actually, where obviously like there's more apps being built in the Terra ecosystem, which has been pretty impressive to see. And what they're doing is the airdrops that some of these protocols are issuing, and the Terra Foundation, I think, is

layering in rewards to incentivize users to delegate to smaller validators in the set. And this is what I was going at. I think, like, this could be an incentives design where if you're the foundation, heck, if you're the Salana Foundation, let's disagree that that's sort of like the more neutral party that has a really strong incentive, not to like for the network to be secure. the same way that the Ethereum Foundation and Consensus did it early on, and the Tara guys are doing it. Well, let's just create incentives to stimulate a very more vibrant validators,

and incentivize users to delegate to the small guy or to even subsidize part of the hardware. I don't know if this would be practically possible with Solana, but this is an idea that I've had, which is Tara is doing it, and I found it interesting because even as a sort of as a fund or what have you, I was like, okay, this is interesting. I'm just going to re-und delegate from the large guy and try to re-delegate to maybe the guy that's on top 10 or top 20

and has never has been slashed or what have you, never skipped the block. Yeah, I just want to add something, you know, like I don't try to say that, I mean, I am happy that like Ethereum can run on a Raspberry Pi. I just try to say to look like, and I think it's one of the most important things, you know, that you can launch a node in any place and to run it, you know. But I just try to say, I mean, to look on reality, you know, like to discuss it, to push it, you know, we need more discussion. For example, now to run an Ethereum note, you know, you need like 32 is, how much it is it? Do you know how much 30s right now? It's like $120,000. Is it a lot?

Is it like expensive? Is it there, I mean, I mean, how much there? Or, I mean, how much? BPI is cheap, but like the stake is expensive. So I mean, it is a lot of things that we need to push and I'm 100% agree that it should be available to run anyone a node at home. This is definitely, I mean, the right of that blockchain should give you. I do want to make one quick distinction, like 32Eth to run a validating node, right? But like you can run a non-validating node at home, which is important, which is also essential. So that an individual can read and write to the blockchain without going through any third parties. But I've talked so much, David, I want to let you get a question in here. Well, I do want to move on to other subjects,

but I first want to maybe hopefully wrap up this conversation with this question. And I'll put on my skeptical ETH maxi hat and say that Ethereum as a consensus system is built to be neutral to allow any sort of expression of alternative systems to be built on top of Ethereum. That's kind of its goal, maximally simple layer one blockchain to allow layer twos to be however they want to be. And so my skeptic hat is saying, why didn't Solana get what it wanted to get out of, like, a more scalable platform as a layer two to Ethereum? And my malicious skeptical hat will say, well, if you deploy as a layer two to Ethereum, Solana wouldn't be able to do like a VC pre-sale raise and enrich a lot of many early founders.

Like they wouldn't be able to hype themselves up as a layer two in the same way that they would be able to hype themselves up as a scalable layer one. And so they perhaps chose the layer one path rather than a layer two on Ethereum with a money motivation. Right. And to me that like taints the incentives of the bootstrapping the genesis of this ecosystem. So that's my skeptical Ethereum Maxi hat. Why is that wrong? Constantine, I saw you shake your head. Why is that wrong?

Yeah, yeah. You know, like, do you know how much like this L2 solution now raising? OVC money? Do you know the valuation? I think Ibrichum just did a $1.2 billion one, right? Yeah, much bigger than like all the one solution. So any like who's that one to build. Well, so the question still stands.

Like why build a layer one instead of a layer two? Yeah, so the question is the same. Yeah. I mean, like, layer two solution still has some, I mean, like, price, cost, you know, like to run on Ethereum. It has some restrictions. It's not so, I mean, it's dependent on what you can do in Ethereum, too. So you need, like, if it's like roll up, for example, then you need to have an ability to, like, I mean, to execute it on Ethereum. It's something happened.

And this is like price. This is like a user experience. It is like some issues that are going with like L2 solution. And, you know, like it is a lot of people who are, has own vision of a solution. And it's good, you know, like it's a big thing. And they have it. Why they can build own way how they think like this layer one should work. And about like this, we see money.

I mean, what we see is doing. are they usually allocated capital. And not all of them are bad, you know, I am allocated capital in many blockchains. And I allocated capital. It was a small capital. It was my pocket money allocated in Ethereum. And it was a big thing for me. You know, I am a boy from Kalingrad, you know, like I don't think that you know where

is Kalingrad. But, I mean, I just try to say that like, you see me this chance, you know, like to do it. Salana didn't give a chance. They didn't like give a chance, I mean, to everyone to invest. but not because they don't want to do it. Because the market changed. It was impossible to make ICO in 2018, not because you didn't raise capital,

but because it was security risk. They're based in US, guys. And it is reality, you know. And as they did, I think, by 40 cents and something like that by Coinlist. And a lot of people can participate in it. So it's not a lot of people participate in. So they give an option to everyone come in. So I mean to answer this question that I am, you know, like for broader ecosystem,

than more solution we have, than more competition we have. Do you remember like how slow Ethereum development was three, four years? Now we are, Ethereum community is much stronger. It's better. Why? Because it is like some competition in the market. It's good for us, you know. It's good for Ethereum believers that it is some strong people like building something else.

and this push Ethereum also forward, and I think it's good. Tim, Grasio, do you want to add anything upon that? Yeah, look, back to your question, David, I think there may have been some motivation to, and look, we've seen that in ICOs, right? People realize you build your own, and there's much more sort of the idea of why employees leave Google to go start their own. There's more upside. So there may have been some of that.

I think it goes back to the very, very first question, which is I think that Anatoly had a vision for a different architecture design to a blockchain. And Vitalik's been talking about scaling in Ethereum since day one. It's been an issue in everyone's mind. And Anatoly, I think from his perspective, had a different way of constructing a blockchain. Credibly. Like it's not like BSC, to your point, David, you were the one that brought it up. It's not avalanche.

It feels more unique in its architecture and its design. that is refreshing because we don't really know. Like, I don't think we have perfect answers to how these systems will work. I think it's very early. We can try to think about this stuff. And look, how much has a roadmap of the theorem change over time? And I think, you know, to me, that's instructive of we don't know. This is why this space is so exciting.

It has a lot of technological challenges and social challenges that haven't been resolved. But it's fascinating. That's why the smartest people keep coming in the space because people love working on difficult problems. And so the other point that I wanted to make is I think adding to that, whether you build an L2, like arbitrarum or optimism, you're still sort of beholden to L1 and what happens at the L1, right? And so, to be fair, if you really want to break from this architectural system that is Ethereum, then you have to break and you have to make a different, you know, a different system. Now, my thesis is it will be a multi-chain world, and there will be a lot of connectivity between these platforms. Now, yeah, we talk about composability and all this sort of stuff, but by and large, I think we can all agree here that it is win-win in many ways, where there might be huge gaming applications in Solana and social applications in Solana, and then there'd be a much thriving, evolved, developed, secure system of defy and Ethereum. And let's talk about that.

Let's understand the connectivity of these chains because I think it will happen. I think it's unrealistic to assume that one change will rule them all. I think, you know, it is net positive to see flow, even though people have terrible experiences there and realize very quickly that sometimes, sometimes decentralization does matter. It's sort of like flood insurance. When shit hits the fan, you're like, oh, okay, I should have bought insurance. But people realize until they want to withdraw and stuff. But by and large, I mean, it's bringing on how many users have NFTs brought to Web3.

And look, the idea is even Libra coined, not to get too off topic, but even Levera, I was slightly positive on because I said, okay, well, you have two billion people that are all of a sudden going to wake up with a wall and say, what the hell is this? And then it's like, okay, I want to earn money. And what else can I do with this? And I think that's what I'm more excited about. It's perhaps a more practical approach. But, you know, I think is Solana an L2 to Ethereum? Maybe. Or maybe, possibly, right? You just build a nice bridge. And it's a hard problem, these bridges, but I think someone will crack that matter. Yeah, can I add one point here? So, for example, I also invested, like, in Arbitron,

like in some other projects. I should disclosure it and I'm a full disclosure to you. Yeah, so also like I'm a good friend of like Alex who is building the KSink and it's amazing software and I hope that it will be successful, but it's a little bit different, you know, like it's still, I mean to launch it to, I mean, to bring ecosystem, it's still really complex. and I also like had a team that is working on EVM for Salana. And you know, like it's EVAM just a program inside Salana. And my vision was I like allocate capital to, you know, to build the roll-up. It's called Neon Labs, you know, like it's like to build a roll-up from Ethereum to Salana, you know, like to execute Ethereum,

EVM, but use Ethereum like security and Salana scalability. So my goal, you know, is that it should be all interoperable. It should be all like more like tied together and use the best features of everyone. Yeah, I think we're in full agreement about kind of like a, you know, a multi-chain world, right? Whether that's like, you know, we already are at a multi-chain world, which is what I say when people ask that. It's like, look, Binance and Coinbase, these are all additional chains. These are side chains, right? And they settle on these public networks.

Let me ask you another question. This kind of weaves in maybe soul as an asset, as a token and kind of the valuation of it. So another thing that's kind of tripped me up in evaluating Salon in the past is this, this pie chart on the far right, which is distribution of Solana. And I think Constantine made the point earlier. Like, okay, for folks they can't see this, by the way, 48% of Salana distribution, according to a Misari analyst report.

was allocated to insiders, credited investors in the U.S. This is the initial sale of Solana. So this doesn't account for how it's distributed since that sale versus Ethereum, you know, 15%, right? So we had more concentration at the very early stages of Solana, which kind of lends in sort of the crypto-native crowd to people calling a Solana kind of a VC chain, if you will, right? not as not birthed by the community like something like an immaculate conception of a Bitcoin or because

Ethereum was the first ICO and it was kind of publicly available and it, you know, it got through that gateway and issued publicly. Like it has kind of a special story about its issuance. Salon was birth just like any other kind of Silicon Valley VC project. And by the way, not their fault, right? We understand the financial prison that we live in in the U.S. for those of us who are listening from the U.S. that prohibit some of these, you know, ICOs and in crowd offerings and this sort of thing. My question is, how does this affect the trajectory of the network, though? We've had this ongoing conversation about monetary assets in crypto, right? This conversation of is Bitcoin money. Is it a store of value? This conversation, ETH as money,

as a store of value, is a pristine collateral, but as something that is used as a unit of exchange in a meaning of the account. Now, we have Salon, which is less distributed from Genesis. Does that mean it takes a different path, do you think? Does this affect the decentralization of it? There's no proof of work period of time where it's distributing. It's kind of going back to the validators and the owners. So what are your thoughts on that?

And our souls essentially competing as money. Santiago, let's go to you first. Yeah, I want to make one point, which is if you look at the blue shade in this chart that you pulled up, I think it's a little tricky, right, because there was no VC allocation in Ethereum, although there were some very, very large Ethereum holders that participate in the SEO, that had that knew each other that collectively owned a big, big stack. I think Insiders is a little bit misleading because there were large whales in the Ethereum ecosystem, just to be fair, that collectively owned a big, big, tranquil and Africa.

And over time, I think what was perhaps one of the best things that came out of the 2017, ICO boom, was that people were spending their ETH, and that led to reorganization and further distribution of ETH across many, many hands. But it's a little tricky, but I'll take the point, right? I mean, is Solana VC-C-coin? And what is that? What are the implications of that? Because every other network, to your point, Ethereum was a lot.

the macro conception of what an ICO was and it was, oh, shit, we can't do this. And so we're forced to work within a construct. And it's very difficult. It kind of is a dialogue that we should have regulators is like, what are we designing here? Because what are the side effects of this uncertainty? But anyways, I think a couple of things, right, if it's centralized, I mean, I think Solana, one of the things that I've been thinking about is how quickly can a network evolve and adapt? For a long time, it felt like Ethereum was sort of gridlock. And it was very difficult to get shit moving. It was difficult also to fund development.

If you were a whale, if you were a protocol, it was somewhat difficult. It's like, who should I give money to? Okay, Joe Lubin spun up consensus, which a lot of really good projects came out of that. And I think, look, kudos to that. And I think the Ethereum community and protocols come a long way as a result of that.

But it was difficult, right? I wonder for many years, like, okay, if you're a defypher protocol, how do you give back to Ethereum? Because I was like, how many actual developers are thinking about ETH2 scaling solutions? And what if I wanted to give grants to that and have some say in that decision-making process? And it was difficult. And I guess we're competing designs.

And look, I agree with Constantine. I think the pace of development in Ethereum, maybe it was defy to put pressure on the network. It's like, all right, we've got to figure our stuff out quickly. Or a combination of that, defy taking off, a killer use case. and then other protocols launching. I think it's healthy competition goes a long way. I think Solana, again, is at that stage, and other networks are more centralized,

and that allows for certain changes in the protocol to be, they're more agile. Now, you may agree if that's good or not. I think some design tradeoffs and changes in Solana and decisions have been made in a fairly swift manner by a few insiders, that, you know, you have a community call and what have you, but at the end of the day, you know,

you can credibly vote certain things. stuff amongst a few people. That's, I think, I think that's still the state of the world for some of these networks, including Solana and DFINITY and maybe FilePoint, where like, you know, a few funds and large holders, including the team, unless the team is abstaining, can pass this stuff. But ultimately, like, I'll give you my more practical answer to all of this is the beauty of a blockchains is it's this hyper-competitive world of open source. So if you want to do dumb stuff and you want to do stuff that destroys value and it's short-sighted or near-sighted, people are just going to go to another blockchain.

And that's a beauty of competition, right? It just keeps people more accountable. We tend to think about like, oh, concentration is bad, right? If you're Apple, if you're some random Web 2 company, yeah, like people can just vote this stuff or proxy vote and whatever. And no one, there's no accountability. There's no transparency. But you juxtapose out of Web 3 world, which is open source, ruthlessly competitive, and the cost of copy is barely nothing. So, like I think protocols, whether they're apps like Defive protocols or layer ones, are always beholden to, hey, we start doing stuff that piss us off the community as small as it may be, then we're not going to go far.

And so even if you had, even more so, right, if you have a big, big stake in a network and you're a BC and you're a, a, a, a, a, a, a, a, a, a, a, a. team, why would you destroy value? And you're being held accountable in real time because it's open and transparent. And that, I think, is the biggest, sort of like the Heisenberg principle, people are observing you in real time, being super critical of what you're doing because everything is publicly visible and immutable. And there's a digital footprint of everything that is being done in these networks. And I think that while concentration, I'm not agreeing or not saying that is good or bad,

I'm just saying concentration, you should decentralize over time. Yes, sometimes being more centralized can help in agile development and making decisions. But at the end of the day, blockings are coordination tools and the community is the layer zero of all of these networks. And if you don't listen to the community, even though they might have a smaller stake, you're done. You're not going to, it's sort of the fastest way to be irrelevant and die in this ecosystem. What about that second question that was woven in there, which is about souls having a monetary premium? Do you think, does that factor into your analysis of the valuation of souls?

Right. Like right now, it's interesting because, like, you know, the framework where we see things like Bitcoin is primarily store of value. Ethereum, it's like we got capital asset, we got cash flows. We also have a commodity being used as gas. and we also have it being a store of value, so there's monetary premium. Do you think Solana is valued in the same way that Ethereum and Ether is valued, or do you think there's a different valuation lens through which?

Or do you think, like, sometimes people like me tend to overanalyze all of this? And it's like, the market doesn't care. It's just kind of a narrative. And so however this plays out in the long run, in the short run, it's just going to be valued based on the way Ethereum. is valued. It's a great question, Ryan, because I've come from a fundamental background, much like you, and I like Ethereum, especially now with EIP 1559.

I don't think, by the way, I don't think most people appreciate the full extent of EIP 1559. I think most people are just like, like, concentrated or focused on NFTs and implementing those. But like, I don't think it's full, okay, I don't think the entire market has woken up to the idea of how transformational EIP 1559 is to Ethereum. Like, let's just start with there. I think the market, because it's so early, we can't even agree on valuation methodologies for crypto. I mean, it took 40, 50 years in traditional markets for Benjamin Graham and like in valuation methodologies of P ratio and valuing it off of EBITDA and recurring revenue. These things take time.

I think it requires like banks to like put out like equity research reports or like, you know, folks like us that like are tweeting, oh, look, you know, some of these like, like, protocols are trading out distress multiples and they have all this cash flow and people are like, oh no, I'd rather ape into like some random protocol that has no traction. Like this is how irrational this market is. This is why I don't short this market. So I don't really know how people are valuing these networks at times. I can, I think it with the theorem, it's easier for me to understand the value proposition of what EF is as a substrate in the system and seeing all the activity. And I think in a similar manner, my framework for Salon is not two to similar from theorem, which is you have soul, you're going to consume soul, maybe less.

But it's sort of like how the things that I rest on, where I get conviction on is what I said earlier, which is number of developers, which is now up to 1,000 in Solana, how easy is it to build? What are the applications being built as a proxy for how big can this network get, the number of transactions and settlement? And putting aside, hey, let's just assume that this network's like, going to be attacked and all this stuff.

Like this stuff can be figured out. But you discount, by the way, you discount the valuation of Solana at this stage based on these risks we've discussed in this call. Whereas Ethereum is far along with that. You know, when London was announced and EIP 59 was also agreed upon by the miners, I'm like, all right, well, to me, that was a very clear motivator of an exchange the dynamic of high-lookethear. in a very meaningful way.

And I can tell you other large players in the market that hadn't any exposure to EF also were very, very observant of this dynamic. Because for a long time, it's only been Bitcoin. This monetary premium you talk about, Ryan, has only been Bitcoin. And so, oh, you know, it's like, how many, how many Bitcoin maxes are like, oh, what's the supply of Ethereum? It's just like they would always go to that. And it would be like the most dumb, like argument that you could have ever made. but lo and behold, you know, people listen to that. And then you have a network that is burning.

And then you're saying, oh, wow, it's a settlement later of the internet. Oh, wow, all these transactions. Oh, there's a very clear way to value this network. So anyways, a very long-ended response. My framework for Solana is somewhat similar, very similar to Ethereum. Does it have a monetary premium today? TBD. Constantine, do you want to touch on these subjects?

Yeah, you know, like I mean, you also should understand that it is a discussion, you know, like if we like say that Ethereum and Salana are children. So Ethereum is seven years children, you know, like and Salana is three years children. Are they different? Yes, of course, like they have different problems on different level. In case of, I mean, back in 2014, when we more thoughts about like how, what is their like value of these blockchains? Where is there, I mean, token value, how we can compare it, you know, like, and we like try to compare it, like, Ethereum, for example, with a country, you know, like, and where you have microeconomy and macroeconomy. And there are, then more transaction inside, the more companies

inside, you know, like the centralized applications, than more activities there are, the more values there are, than more you can extract, you know, in case of burning. The same, I think, is with Salana, you know, like if you have a developers inside, if you have applications, they make transactions, then they can do transaction with Ethereum. For example, cross-chain and macroeconomy, I happen, you know, like, then more value for, and the more narrative to use, I don't know, like, Bitcoin, Ethereum, or like Salana as a currency, but you still will look on numbers, you know, like, you still will look how activity inside, how many, like, assets locked, for example.

And this system is much more transparent than current system. And that's why we are here, you know. That's why I love like all these projects, you know. That's why I love to spend time on it. And yeah, so I think like any products that will have real activity, not just a transaction, you know, for, I don't know, like validation or for something, that has real people inside, real products, they will find their own value. And they will find own value proposition.

And they will have extra, you know, know, like value and maybe like can be used by as money. And you know, like I believe like is as money and big funds already invest in is as money. And like for example, all why they like accept only is as money because, you know, like it's a really good case and good example. I appreciate that perspective. And I want to, as we come to a close on this panel and I appreciate all of you guys as times and going a little bit over. So I'll ask this one quickly. Ryan and I are often criticized as being eth maxis. Ryan will definitely say that he's not an ETH maxi. Definitely not, David. Definitely not. And I would also like to reframe like what I am

a maximalist in is developer activity. And if we are talking about smart contract platforms, which I do believe is where this industry goes, I will be a maximalist about whatever the developers are a maximalist about. And so if one specific system has like 99% mind share in developer activity, then I am 99% of maximalist in that thing. And so what it would take for me to become really, really bullish about Solana is seeing a developer ecosystem grow around Solana, but also things that the developers are building on Solana being built there first rather than being built on Ethereum, right? Because like we are seeing a bunch of like copycat NFT projects, like now we have Salana punks,

and now we got Solana squiggles. like what are you really doing here? And so like my question to you guys is, what are you excited about that's coming to Solana that you might think will come to Solana first before it comes to Ethereum? Santiago, you want to start? It's a great question, David.

I think you'll see perhaps more complex, computationally intensive D5 primitive like option protocols and perps that have been struggling in Ethereum. You know, things like Mango or Synthetify, you'll get just a number of users of some of these protocols. More complicated, especially option protocols, haven't truly taken off in Defi and Ethereum. And I think it's solidly because it's expensive to update to refresh. And so I think that's one that comes to mind.

The other one is gaming, something like Star Atlas or, I think some of those applications, maybe social as well. Those are the of my top three kind of use cases that I think may, may garner more attention. I'm seeing, like, from a use case perspective, in the developer composition, to me, it was interesting to learn that a lot of these developers are like new folks that don't know solidity and just entering the space. Few have been, like, oh, rage quit Ethereum because it's like, I'm done. there's a couple of examples but it's mostly been like folks and um so like uh i think salana has a big office in chicago Chicago is a very very like um trader uh focus like market and

there's a lot of folks like like sam was at jump and you know it's pretty tech sorry it was like jane street and so or jump and some of these shops that you know they're like financial guys but they're also quants they're developers so like i think you'll see more and more developers in that arena. And so naturally, because they're coming from that field, they're going probably want to build more complex, DFI primitives on Solana. So that's what I'm keeping an eye out for. Constantine, same question to you. What do you think, what's the developer environment on Solana going to be like? And what do you think are, what are you excited about coming first to the Solana ecosystem? Yeah. First of all, I want to say that there's a lot of problems inside Salana. You know,

us tell a lot of good things, but I mean, it's still, I mean, early days, it wasn't a lot of hacks, so we don't have any, like, attacks and don't know what we can, what can happen. It is not a lot of auditing companies. I mean, it's a big market, so, like, maybe somebody like, built an audit company for Solana. And it is really difficult to, like, develop publication right now because it's not so many examples, good examples. And, you know, like, it's the beginning. I mean, to launch, like, not EVM product is really complex. And, but, I mean, I think, I think, like, with more experiments, with more tooling, it will be easy, easy and more easy, you know. And I'm agree with, I mean, Santiago about the use cases, about financial

this case about Defy, about games. So where you want to, for example, to, I mean, to use, to make like application with cheap transactions and, I mean, try to, you know, like to do it right now. So some of them will try to build on Salana. But for now, we should understand that it's more complex than build it on solidity. but so i mean i'm also have a lot of own issues you know like solana is moji threaded so it's parallelized it's also it is you know like it has a lot of unique features guys this has been a fantastic uh discussion i know you know david said he's kind of a developer

maximalist i would say like for myself i'm a i'm a i'm a bankless maximus so i carry We care very much that we don't create a new financial system that is owned by a new class of bankers that just take it over like our existing financial system. And I actually think some diversity in experimentation is good. And I do think Solana provides us that for sure. And look, guys, it was just great having a rational conversation, like a neutral conversation about this topic because crypto is so tribal sometimes. and it's hard to separate the signal from that noise of, you know, tribalness that goes on.

So we definitely appreciate you guys joining and thanks. I guess maybe my last question for each of you as we close is this. How do you think that Solana and Ethereum can live together in harmony in the future? Like, how do you think this is going to really work out for both of them moving forward? Santiago, let's go with you. David's laughing at my question. Let's do that. Yeah.

I think there will be coexistence. So let me just agree with that. I think the way it may look thinking probabilistically is kind of like WeChat has developed in China, because they totally leap fraud financial infrastructure. So it started with a social app messaging. And then they built a suite of products around that. And then you combine that with like the sort of aggregation theory. that I think this space will really kind of go towards.

Because right now we're all beta fissors. It's like a spec of dust. Like a number of users, we really get paid to like experiment with this stuff that has still a lot of risk in Ethereum and Bitcoin everywhere. But like, you know, just give an example. Maybe a lot, so long is just an onboarding funnel, a big one with that.

You have like things like Star Atlas and games and social applications. And then you might just click a button and say, oh, I want to earn yield on. this or swap my in-game items and then that might get settled in Ethereum depending on whoever you're using. The end user may not even know or care which blockchain that gets settled on. It just by default will get settled on Ethereum. Let me tell you why. Because when, let's just assume that 95% of users don't interact directly with layer one. They don't even know maybe they're interacting with the blockchain, but large financial institutions may, so you paypal or

Visa or JP Morgan or whatever. And I think at the moment, security is the thing that most people say, hey, do users care about decentralization? I think they may not even care about decentralization. I think Binance smart chain kind of told us that in a very clear way, at least. So if we assume that most users may not value decentralation as much, they might value utility. So again, they might be starting Solana, and they might swap or use some sort of financial function, which you're going to be using Ethereum, maybe, potentially. Why? Because your aggregator, maybe the JP Morgan or the game that you're using, will route to Ethereum because it's safer, or because they perceived it to be safer, and then security begets more

liquidity, which improves the set, like the slippage on the trade. And so I think that's like the state of the world that I'm excited about, which I think Ethereum has a moat in Defi, which is it's most secure chain today. So if you're an institution like Visa or PayPal, you're going to use Ethereum. And so more liquidity because security against more liquidity. And so it's that virtuous flywheel that is just going to be more efficient to trade on Ethereum inside. And your aggregator, your financial institution, your app, whatever you're using may just

decide to route it to Ethereum because it's just easier to do. So that's probably, now technically I'm not in a position to like comment on the feasibility of that. But I am actively kind of thinking about bridges and how that might work. So, so yeah, I think that's how it probably, you know, works. You have millions of users in Solana, which are going to require doing other things other than playing. And some of those, in that journey, they're going to use Ethereum. What's your take on this? How do these chains coexist, live in harmony?

How does this play out over the next few years? First of all, thank you for the discussion. I mean, yeah, it's great that we discuss all these things and openly. And I think we should speak more about the problems. And they're, you know, like, who are like this salana in Ethereum? It's like we are, like we as a community. We are people who is doing it, discussing it right now, who is pushing it like in some direction. And what we need, like, we should keep this blockchain decentralized together.

Salana, like Ethereum, like to less all validators of Ethereum runs around Salana. And Salana validators around Ethereum nodes, you know, like, and it will be already big things. And we have what we are building, you know, we are building like internet of value. And it will be bad if it will be built on only one blockchain, you know, because it is also a risk. it will be good if it will be a lot of different layers and it will be more secure, I think, that collaborating together to, you know, like, I mean, to give everyone on the planet, like to make a transaction without, like, permissionless and not censored. And our goal as a community, like, of these, like, blockchains is, you know, like to, like speak more

about it. To push this block chain, keep them to be decentralized, you know. And this is important. You know, like so what we can do, what like Salana and Ethereum, we should like work together and bring our values, I mean, to our community and try to keep the blockchain decentralized and work together to attract more like billion people here and give them this values. Absolutely. Those values are the layer zero of this entire crypto space. Santiago, Constantine, it's been fantastic to have you. Thanks for walking us through Solana today. Learned a lot. Great discussion was had. Thanks so much. Yeah, thanks, guys. Really appreciate the time. Bankless listeners, risks and disclaimers, of course, crypto is risky. So is Defi. You could

definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot. Living a bankless life requires taking control of your own private keys. Not your keys, not your crypto. That's why so many in the bankless nation already have their ledger hardware wallets, which makes proper private key management a breeze. But the ledger ecosystem is more than just a secure hardware wallet. Ledger is the combination of the ledger hardware wallet and the Ledger Live app.

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