Bankless - Jito's Impact on Solana with CEO Lucas Bruder

Episode Date: December 20, 2023

This is an exploration of Jito, the Solana validator client, the staked Solana token JITOSOL, and MEV optimization engine. The recent Jito airdrop show the whole industry as millions of dollars in value flooded into the Solana ecosystem. Joining us today is Lucas Bruder from the Jito team to walk us through the basics and nuances of this multifaceted project. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT   ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2  ⁠  🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask   ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum  ⁠  🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo   🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku   ------ TIMESTAMPS 0:00 Intro 6:00 Jito Airdrop 8:45 What is Jito 12:00 Staking and Decentralization 17:20 MEV Optimization 25:20 Fees and Failed Transactions 33:20 JITOSOL 37:00 Solana Economics 42:00 Staking vs JITOSOL 45:40 Ethereum vs Solana 53:30 Jito Governance 59:15 Stakenet 1:05:40 Solana Governance 1:09:40 Choosing Solana 1:13:30 A Successful Network ------ RESOURCES Lucas Bruder https://x.com/buffalu__?s=20  Jito Labs https://www.jito.wtf/  Explorer https://explorer.jito.wtf/  ------ Not financial or tax advice. See our investment disclosures here: https://bankless.com/disclosures 

Bankless Nation, welcome to this exploration of Gido. Gito is a Solana validator client, a staked sole token called Gito Sol, and an M-E-V optimization engine, all built into a single software suite, which we call Gito. Recently, the Gito AirDrop shook the entire crypto industry as $200 million worth of Gito is distributed to over 10,000 addresses on Solana. The Solana ecosystem seems to have turned a new page ever since. Notably, fees on Solana have started to emerge, changing the game when comes to Solana Economics, and Gito has found itself right at the center of this conversation.

Today on the show, we have Lucas from the Gito team to walk us through the basics and the nuances of the Gito system. How does it work? How is it similar to Ethereum? How is it different? Bankless Nation, I've been doing some of my Salana homework. I think you're going to learn a ton about Solana and Gito in this conversation, as well as where Solana is in its development arc. But first, before we get into this conversation, our friends and sponsors over at Ambire want you to check out their wallet. But calling it a wallet really is underselling it. You've heard Ryan and I talk about account abstraction

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I think the Gito conversation is a gateway into a broader conversation about Solana. Gito is a Solana app that relates deeply to the Solana protocol itself. And the emergence of alternative Solana clients like Gito and Fire Dancer spawns the conversation about Solana governance, right at the same time that Jito air drops its governance token to govern over Gito. To me, the Salana conversation is potentially at the beginning of a very interesting arc when it comes to Solana economics and Solana governance. I think it's pretty easy to say today that Solana has captured the attention

and energy of these low-level systems engineers and system designers, hardware people, and as a result has produced a very well-engineered crypto system. And with the launch of Gito and other developments, Solana is moving into needing new character archetypes to enter the scene. There is an air drop season happening on Solana right now, where Solana apps are launching their governance tokens, and the emergence of multiple Solana clients will require human meets-based conversations

to make non-breaking upgrades with each other. In the Ethereum world, we have the Ethereum Magicians forms and the All-Core Devs call in order to produce rough consensus as to how Ethereum upgrades. Solana will also need to establish some sort of system and process to make this happen for itself. Solana is entering the very messy world of governance, something that all successful layer ones must enter in order to truly maximize their decentralization and robustness. this is a rite of passage that very few layer ones ever get through.

Solana has gotten to that point, and now it needs to get through that point. And as a podcast Maxi myself, I'm absolutely here to host these interesting and challenging conversations and probably the best way that I can play any role at all in the growth of the Salana project now that Solana is entering conversations that I feel familiar with. And so with that context and preamble out of the way, let's go ahead and get right into the episode with Lucas from Gito. But first, a moment to talk about some of these fantastic sponsors that make the show possible, especially Cracken, our preferred crypto exchange for 2023 and 2024. If you do not have an

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Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction free. Visit arbitram.io and get your journey started in one of the largest Ethereum communities. Bankless Nation, I'm super excited to introduce you to Lucas, aka Buffalo, on Twitter. He is the co-founder and CEO of Jito Labs, which recently had an airdrop inside of the Salana ecosystem that more or less changed the game for the entire crypto landscape. Lucas, welcome to Bankless. Hey, thanks for having me. excited to be here and talk more about Jito and Solana. Yeah, there's a number of different ways that I think Gito nerdsnipes people. One is from the MEV side of things.

One is from the Solana, latency, hardware networking side of things. Another one is just from the economics side of things. And I think that's the way that I approach to Gito is like the economics conversation. But of course, all of these Venn diagrams overlap. I think we're going to approach each one of these angles one by one here on the episode today. But I kind of want to give a take and then a question about what I saw. the Gito AirDrop from the external perspective, from the outside perspective, because the Gito AirDrop seemed to be something larger than itself. You know, it was anirdrop for an app when we've seen

these before, but it wasn't really a typical air drop. It kind of represented something larger than just a drop for a Solana app. It really turned into a symbol for the Solana community at large. And there's this like before and after the Gito drop moment for Solana. And after Gito, if we have before Gito and after Gito, after Gito is marked by a large uptick in Salana new addresses, new, like new highs in salana volume, new TVLs, like a showing of Salana fees. And now there kind of seems to be a post moment for the post-Gito drop. That's at least how I interpret it from the external perspective. I kind of just want to ask, what was this moment like for you? What was it like to be on the inside? Yeah, it was super exciting, very overwhelming. We didn't expect it to go this well. I think

you know, it went much better than we could have ever anticipated. I think there's a lot of people excited about participating in GEDA governance and there's a lot of other protocols that are looking to decentralize very soon on Solana. And so I think, you know, it got a lot of people excited about Solana. There's a lot of good press there and now you have a lot of people coming over to Solana from other ecosystems and, you know, interacting with a lot of the DAPs on Solana and really just realizing like how good of a network. it is, how fast it is, how cheap it is. And I just love to see people coming over and trying it out. So one of the reasons I think why the Gito drop was so significant is because Gito isn't just an app on Solana.

In the same way that Lido is not just an app on Ethereum, like these things relate to the protocols that they stand upon. And so that's one of the reasons why I think this air drop mark made up with such a significant mark on the Salana ecosystem and also the broader ecosystem as well. So maybe we can just start at the very beginning. Like what is Gito and why is it so important for the Solana ecosystem? Yeah. So Gito Labs builds infrastructure to efficiently extract MEV on Solana. There's a lot of spam and arbitrage transactions that are failing on Solana. And we kind of predicted this would happen back in 2021 and wanted to work on solving it.

So Gito Labs built a lot of MEV infrastructure, created the Gito Salana client, which enabled the efficient MEP extraction, built the Judo block engine, which is kind of like a block builder, equivalent, you know, like a Beaver build or R Sync and stuff like that on Ethereum to kind of efficiently extract MEV. And then also built a lot of systems to make sure that

that MEV is distributed to stakers. I think that's super important. You know, valid errors can choose how much they want to distribute to their stakers. and also a contributor to GEDO Network, which is a liquid staking protocol on Solana. So Gido Network is, you know,

operates the Gito sole liquid staking token. So the Gito sole liquid staking token, for the Ethereum familiar people out there, that's like the staked eth from Lido or the R-Eth from Rocket Pool. But the interesting thing about Gito is that it's, that is stacked upon a client. And so in Ethereum,

we have things like Prism, from Prismatic Labs. We have Lighthouse, Nimbus. We have these different clients that run Ethereum, that run Ethereum consensus. And that is also what Gito is. Gito is also a client, along with a staked Soul token called Gito Sol.

And then it's also this MEV extraction optimization engine. So it's like these three core products all kind of stacked on top of each other, right? Yeah. So, yeah, anyone, it's a little, The staking on Solana is a little different than Ethereum. So anyone can run the Gito Salana client. Actually, like currently today, there's like 46% of Solana stake running the client over 300 validators and roughly $14 billion of sole stake to the client.

And stake pool, because Solana has delegated staking, stake pools can delegate to any validator that they want. So there's validators that are running Gita Solana that don't. don't have any GDOSL stake, and there's valid airs that do have G2Sull stake. There's also, I think every liquid staking token on Solana delegates some percentage of their pool to the Gita Solana client as well. So it's really just like an open source, permissionless, valid air client that anyone can run. Can you talk about just the synergies between this tech stack? Because some parts of it just make a lot of elegant sense.

There is, like having a client that also is MEP optimized relating to a staked sole token, all of these things kind of make sense. Can you put these pieces together for us? Yeah. I think there's, I think there's definitely a lot of overlap. I think liquid staking tokens are a really good opportunity to decentralize stake on Solana. That can be, you know, geographic decentralization, client decentralization, and, you know, all the other, you know, types of decentralization that exist. And so, you know, I think Jada sold does pretty well. out that, you know, helps kind of bootstrap the growth of the Gito Salana client. And also it can, you know, a lot of the validators that Gito Solstakes to and the

stake pool are sharing the MEV with stakers. So there's like a very, you know, up until a few weeks ago, it is a very small amount of MEV, but with the recent uptick in trading activity on Solana, that has massively increased. I think the, I was looking at the number of, earlier today and basically over 50% of all MEV extracted by the system has happened in the last two weeks and it's been live for a year now. So there's been like a massive, massive uptick in trading. There's a lot of improvements on the block engine that we can dive into later. Can we stop and unpacked why the existence of a staked sole token adds to the decentralization of

Solana? Can you unpack that? Yeah. So typically what what state will do is they will go to like their phantom wallet or soul flare some other wallet on salana you know they they go through the validators they want to stick their soul they'll just choose one validator to stake that too and so um you know they're they're staking that to one validator it's not spread across a network of validators um judasol kind of improves that and basically when you deposit soul into the uh stake pool program that judo soul runs on There is an algorithm running that will kind of look at all the different validators that are variable to delegate to. And we'll delegate to those validators according to some like performance and decentralization metric.

So instead of your soul, like if you have a hundred soul, sticking it to one valetaire, now you have a hundred soul. You know, there's a hundred validators, you know, one sole per validator. And those validators are spread across the entire world. So anywhere from like California, New York, Germany, Tokyo. Singapore. It's kind of spread all over the world. So, you know, it increases the decentralization of the network from like a geographic standpoint and then also, you know, helps with some of the uptime that you, it helps reduce the potential for like downtime invalidators and losing staking rewards as well. Okay. So if I just have soul in my phantom wallet, my Isolana wallet, I could just

just delegate that soul to a single validator and then I would start to get some of the issuance of soul and some of the fees of Solana just because that's what that valetor provides me, which is a step towards decentralization. It's better than just me having vanilla soul in my wallet and not using that at all. But what you're saying is that if you just simply have this Gito system, you can actually not really have to be locked into one single validator and instead the Gito system is a little bit again we're probably going to have to use a lot of ethereum metaphors here because that's what the bankless um bank's audience is familiar with in the same way that if you buy uh lighto uh stake dith you are actually spreading out your ether to like 32

node operators and eventually like that is destined to be according to the light of roadmap that's supposed to be permissionless so the same kind of way like rather than just picking one validator and having that be locked into that one validator and that one validator again crew a lot of soul. Gito spreads it out to many, many, many, an open set of potential validators. And it also solves a simultaneous problem of having non-humogenous soul, right? And so if I stake to one validator, my soul is stuck to that one validator. But if I put my soul in Gito, I get Gito's soul back in the same way I get staked Eith back from Lido. And so it both spreads it out to many, many validators and I get a token back in return that can go back into the Solana

DeFi ecosystem. Is this all correct? Yes, correct. And yeah, there's an algorithm that's currently running and that'll transition to StakeNet, which I think we'll dive into in a bit, assuming that the Gito governance wants to switch over to StakeNet. And basically that will allow the protocol to, if it sees a validator is performing poorly, or maybe you have like validators that are moving around and there's too much stake in one region or something like that, then you can start to move that stake around. So like as a, you know, if you want to support the decentralization of Solana and also have like a very high performing valid area set that your sole stake to, then the Gito Soul stake pool kind of just takes care of a lot of that for you.

I think if we were talking about a standard staking pool system on Solana, everything that we've talked about thus far is more or less like table stakes. Like you have. a system for spreading out soul so that no one validator is enshrined. And you kind of load balance based on metrics to optimize for things. This is all kind of like table stakes. And we haven't actually yet added in the MEV component as well. And I think that's really kind of the thing that makes Gito go from table stakes to something like unique and special to Solana. And so you talked about it a little bit, MEV extraction optimization. Why is that important not just from like being a good product, but being good for Solana, the ecosystem?

Yeah. So there's, you know, we ran some numbers like close to a year ago. I think the numbers last I checked were pretty similar, but 98% of arbitrage transactions on Solana fail. And there's roughly 56% of compute wasted executing these failed arbitrages. So if you go on a Salon Block Explorer and you like look at the transactions, you'll see like all the dexes and a ton of failures. And so, you know, that's kind of, that has a downstream impact on users.

Like if you want to interact with the chain and the blocks are consistently full and they're kind of just like spending time executing this entire transaction and then rolling back the state, that's not really like the best, in my opinion, like not the best use of block space. I think, you know, you want to see a high success rate of transactions. And so the Gito client and the block engine kind of helps. mitigate some of that. And essentially, you know, a lot of these people that are spamming the arbitrages, they are trying to, they're trying to order transactions. So like you send a trade, they'll kind of monitor it, you know, see, see if there's an arbitrage between two dexes. And then they'll fire off

one or two or three trades that try to capture that arbitrage. And using the, the Gito Salina client and the Gito block engine, those searchers can bundle those trades together. So they actually execute back to back inside the block. And it's actually, if you know about proof of history, you've heard about it, it's actually right next to each other and the proof of history tick chain. So it's literally like the fastest that you can capture it by the Salana protocol rules. It's just instantly captured. So the goal there is, you know, we want to try to enable this like efficient ordering so that people aren't spamming and try to free up some of the block space. And then also there's the validator and stake around economics as well. Can we go into why there is so much spam and so many failed

transactions on Solana? And this is just a product of Solana being such a high, throughput, low latency chain, correct? Can you talk about why there is this incentive for traders and arbitrages to send out so many transactions? I think the one thing is that it's really cheap for transactions. So I think it's like a hundredth of a penny per transaction. So there's not really like, you know, if someone has a failed transaction on Solana, it's not going to cost them a lot compared to Ethereum where, you know, if you have a failed transaction, then you might end up paying 30, 50, $100, whatever the gas prices. Right, $100 to like try and get like $5 of revenue. So it really costs you to make that failed transaction. Yeah. That, um,

Also, the price of the transactions is so low that there's just so many microscopic arbitrages available. So the price of this, as I mentioned earlier, the price of a transaction is like a hundredth of a penny. So basically, if there's any profit over a hundredth of a penny available on Solana, an arbitrager is going to capture that. So there's just a massive amount of arbitrage transactions. only the first one is going to succeed. The rest are going to fail. And so, you know, I think that's a lot of the reason why I think there's, there's some, like, more engineering-related things as well.

Like, you know, there's a lot of work going into the scheduler to make it have less jitter and make it be more deterministic. So when you set a priority fee, it actually lands in the block where you expect it to. I think another big thing that core engineers and, like, the fire dancer team, team and us and people on Twitter and a lot of people are talking about some other type of, you know, you have the carrot, you need the stick. So how do you kind of throttle those transactions, you know, probably through some dynamic base fee, I don't think copying EIP 1559 and copy pasting it onto Salon is the same thing.

I think there's unique things that there's salon is unique architecture. So I think there's like some tweaks that you can make. to EIP 1559. And yeah, I think that will be, that's, that's an area of research that I'm pretty excited about. And we're starting to see kind of more people think about that and work on that. For the reasoning behind why so many of these transactions are failing, is it because I'm an arbitrage, arbitrager, and I really just want my transaction in. And because it's so low cost, I'll send out 10,000 transactions.

and only one of them will work and then then 9,999 will fail. Or is it that like there's so many Dex arbores out there that, you know, there's 10,000 of them and everyone's sending out one transaction, but only one of them gets it? Like, what is the actual reason? And then, of course, why are they failing? Well, because these conflict after these transactions conflict with each other after one of them succeeds. What is the actual reasoning as to why there's so many failed transactions? Yeah, I think you hit both points.

There's a lot of arbitragesers on Solana. I think there's a few hundred at this point, or at least there's a few hundred signers, TBD on how many entities are like running those signers. So there's a lot of arbitragesers. I think arbitrages will typically send their transaction more than once. I wouldn't say as high as 10,000 times, maybe like, you know, a single digit number of times. And basically only the first arbitrage will win. So, you know, and everyone, everyone's seeing the arbitrage opportunity.

pop up at different times depending on, you know, your proximity to the leader that produced that arbitrage, network propagation, your own code speed. So like, you know, one searcher might see it 10 milliseconds after it happened, another might see it 15, another might see at 20, another might see it like 200 milliseconds later. And so everyone's seeing it at different times. Everyone's firing off trades at different times. There's different propagation latencies associated with all that. And so you know, you'll,

you have an arbitrage show up. The first person will capture it, and then you'll see like a ton of failures. And then also going back to the point of like, the fees are so low that there's so many microscopic arbitrages. Last time I looked, I think the average profit on an arbitrage was like a tenth of a penny.

So there's just like a ton of super micro arbitrages. I think, you know, it is a good thing. I think the, I think it's a good thing that there's so many microscopic arbitrages. I think that it results in better prices. You have all these bots that are constantly rebouncing prices compared to Ethereum

where, like, you know, you basically are going to arbitrage if you can offset the price of gas. So there's pools that sit around that could be arbitrage, but the gas price is too high. On Salana, I guess, price is so low that, you know, there's a ton of these arbitrages. prices are in line. There's just to that the issue of the failed transactions that I think base fees and maybe some other protocol changes will help fix. How does Gito produce fewer failed transactions? Yeah, so we provide searchers opportunity to bundle those transactions.

Can't they just do that themselves? Can't they just bundle up a transaction and send it to them just to vanilla salana? So the vanilla salon of Valadair doesn't support bundles. another thing is that the yeah so the bundles are a feature specific to the Gita Salana validator and so yeah another thing is that

there's a there's like a very very short-lived mempool in the the block engine and basically this lets searchers see these opportunities before they're going to happen they can simulate and predict what's going to happen and basically you know you send trade, they will kind of see that, predict the arbitrage, and bundle the user's trade and

their arbitrage, send it to our system. The GeoLabs Block Engine will simulate it and basically choose the highest payer for that arbitrage. I think, you know, there's, we're also running, in the Block Engine, we're running a lot of different auctions at the same time because you, if you've ever interacted with Salani, you probably see, Like, if you go to the block explore, you'll see all these accounts. And, you know, for someone coming from Ethereum, you're like, what the heck? Like, what are all these accounts doing? So when you build a salana transaction, you have to specify that account state that you're reading to or writing from up front.

So you'll say, oh, I want to like trade on like this orcum market at this public key. And, you know, here's my token account. And this is going to be written to this I'm only reading from and so on. And so our block engine will actually like separate all these bundles and all these trades into different auctions based on the read and write flags for each account. So we can actually run an auction. We're on Ethereum. You're kind of like auctioning off the entire block.

And your price that you pay is relative. You know, there's just a basically single auction running. And the block engine, we're actually like looking to see what's being read and written to. And then you can kind of pull them apart. into disjoint sets and then you can simulate all of them. So you're actually like the, you know, if there's a lot of MEV on like some orcup pool or like NFTs and stuff like that, it won't affect like Radium or Phoenix. That's something we spent a lot of time engineering and working on.

And I think it's been working pretty well. Yeah, that seems like a pretty big engineering lift. Let me try and put that into Ethereum more so that the Ethereum people can interpret that for the people who aren't familiar with Solana. So Solana has this, you know, local, local fee markets, right? And this, I think, is downstream of that conversation. So, like, if this was in Ethereum, it would be something along the lines of an application or a transaction that is going to, you know, change some state of Ethereum. And that state is an arbitraise transaction between Uniswap and Sushi Swap and ZeroX, for example, or like Macha. The transaction

itself would label in the front of the transaction, I am going to engage and change the state of Uniswap and Sushi Swap and ZeroX. And I'm only going to change the state of these contracts. And the things I'm not going to touch is like everything else, you know, like AVE, Maker, Dow, OpenC. I'm only touching these three things I've specified. And then it unlocks those for state changes. And then, you know, then the computation happens. Because that leaves room. for other transactions to talk to AVE and not have to be worried about any transaction that is arbing the, you know, the Dexes, for example. And so what you're saying, Lucas, is that in the Gito client, when you guys are running these auctions, you can actually create separate auctions for space in the block, in the Salana block, for highest bidders that are segregated per activity.

And so there's probably some optimization, some algorithm, because there's going to be like some Venn diagram of semi-overlapping transaction. some are touching the same contracts, some are not touching the same contracts. And so it's a little bit of Tetrising going on to make sure that you can create a very high value block with all of these transactions. But the point is that there's multiple auctions for multiple different slots depending on what that transaction is doing. And then the Gito, what Gito is like an optimization for making sure that the highest value transactions get filtered up and allowed to be in the very first slot because that's

what they're paying for. and then it starts to like fill in from there. But the cool thing is is that it gets to fill in multiple places at the same time. Because if my transaction is touching Uniswap and I really want to pay a very high price for that, somebody else's transaction can are Avey and those two won't conflict with each other. They can both take the number one slot because they're only touching separate contracts. Did I explain all that correctly? Yeah, that was perfect.

I couldn't have explained it any better. Yeah, I think you hit the nail in the head. It's kind of like the, yeah. Yeah, I think you hit the nail on the head. It's kind of like the parallel fee markets on Solana, basically kind of applying a similar concept in the block engine. I think, you know, getting into that a little bit more, I think it's maybe not even like the Ave contract.

It would be like, oh, I'm going to touch this like specific pool inside Ave. or like if I'm talking to uniswap, it's like I'm only talking to like the like staked Eth, USC pool at this address and like, you know, it's not the entire contract. So like we can actually run, you know,

ORCA is a popular AMM on Solana. We could basically run an auction in parallel for every single pool on ORCA and as long as they're not sharing, as long as there's on a overlap state there. Right. And all the point of this is to say that once Gito is done doing its work, it's produced the highest value block possible that it could

produce because it has, it's like a pre-processing layer for Solana, right? It almost is kind of like in a way that I know the engineers of Solana don't like my more imagination based metaphors, but I'll try and do that anyways, which is like, Gito is a little bit of a menpool for Solana and that it processes transactions and orders them in this nice orderly way before it. it actually puts a block into the chain. Is that like a fair metaphor? Yeah, for sure. It's kind of like a, it's like an optimization there for validators to build more efficient

blocks. I think the, the one thing is on Ethereum with the PBS, you have the builders are actually building the entire block. And so you run into some issues there, like a lot of the potential censorship issues, where Gito is, we're not actually building the entire block. We're building pieces of it. So it's kind of like, uh, I think, you know, I think in Shrine PBS is looking at like partial block building inside there.

So you can kind of think of it like that where we are, we're building like the really profitable pieces of the block as efficiently as possible. And then the validator software is handling the rest of the stuff. And the reason why I want to spend so much time on this is A, because it's interesting and worth noting, but also B, because it's like kind of the tip of the Gito stack. Like what is Gito? it is delegated staking. It is a staked sole token, Gito Soul. But it really, again, like the, like I said, the really the shining part of Gito is the MEV optimization and high value block building aspect of it. Can you talk about how that circuits back into the value of the Gito Soul token? Because to me, like if my understanding of Gito's correctly, like Gito will live or die by the value of Gito soul, right?

Like that is like the pinnacle of the Gito system. Gito Soul is supposed to be the most efficient sole asset to own natively on Solana. Can you talk about, can you just complete the circle for us? How does all of the things we've talked about go into increasing the value of Gito Soul? Yeah, so Gito Sol is a reward-bearing liquid staking token. So on, I think on Ethereum like Lido, it's a rebase. So they will kind of credit you more steak to ETH when you receive the rewards. on Solana, all of the liquid staking tokens are reward-bearing.

So the price of Gito Sol and liquid staking tokens as a whole go up relative to the price of sole. So you stick your soul into the stake pool, you get back G2-Soul. That soul represents the soul that you initially deposited plus accrued inflation and m-EV rewards. So the goal is like, you know, any, any, stake pool can delegate to the Gito Salana Vowder client. The hope is that MEDEEE becomes a main like revenue driver for Solana so that liquid

staking tokens can start to realize some of the these rewards in the price of the liquid staking token relative to Seoul. So essentially it has the opportunity to add more rewards to Gito Soul and, you know, it ultimately impacts the API of liquid staking tokens on Solana. And people run the Gito client because it optimizes MEV extraction on their behalf. Right. Like, and so I have enough technical chops to be able to, like, download a client and run it,

but I do not have enough technical chops to be able to run an MEV bot. Like, that's roughly about where my line is. And so, like, for me, as an individual, if I could run a Salana validator, I could just run the Gito client. And I could, like, raise significantly the, bar for me to be able to engage in MEV extraction. Maybe I'm not at the tip top of the Salon ecosystem, but it's way higher than I would ever be as like a semi-technical individual. And so that's kind of the motivation. And the democratizing access that Gito has or the democratizing

power that Gito has for the Salana ecosystem, correct? So yeah, we want to make sure that like everyone can have an opportunity to do this and access to it. Clients open source. It's permissionless. Anyone can connect to the block engine and start receiving these bundles. And there's kind of this marketplace of searchers and traders that are available that we kind of, like, Jada Labs will kind of handle that side and talk to searchers and market makers and figure out, you know, what features do they want? How can we make your transactions more successful? Just make it a better experience. So we kind of have this marketplace that we built up over time with these traders and market makers and, you know,

validators can basically get access to that through the block engine. So, you know, there's block engines all over the world. Right now there's four. There will likely be more next year that will kind of go into more decentralized parts of the world, like Singapore and, you know, other parts of Europe that don't have a lot of stake right now. And the goal is to basically give access to this to anyone. So if you're a validator, you don't really need to care about this stuff.

You can just run the GEDA Solana client, look into the block engine, and start receiving these profitable bundles and help make the network run more efficiently. Can we talk about the way that the economics of Gito impacts Solana? And so maybe we can start with how much of the MEV is being able to be pocketed by Arbor's versus how much of that MEV is getting sent into the Gito Soul token. So what's that like pie split? There's a bunch of value being created here, a bunch of value being divvied up. How much goes into the G2Sol and how much is left being pocketed by arbitrageters? So, yeah, basically anyone can run the G2 Solana Valdeer client. The way it works is that when there's a tip that's sent to the block engine, we try to

optimize the tip for a given set of state that is running the auction. That tip will then get paid out to these programs. The program will kind of split the fee there. So right now Gito Labs takes 5%. That's to cover infrastructure and engineering costs, you know, to be transparent. It's not really close to that right now. But, you know, we're betting on more,

we're betting on more trading activity coming to Solana and things getting more efficient. So GEOLabs will take 5%. The other 95% goes to a what we call tip distribution account. And essentially the tips will aggregate, there for an entire epoch. You can think of it like a validator's MEV piggy bank. So for the epoch, the MEV is accumulating in this piggy bank, which is unique to that validator for that epoch. And essentially what happens is at the end of the epoch, there is a process that runs off-chain, which will distribute, it'll calculate a Merkel tree and a Merkel route. Basically,

it does an MEV-Airdrop. So the air-drop, the Merkel route will get uploaded to the this account and then there's a bunch of transactions sent out. Right now it's around 400,000 transactions every two or three days that gets sent out and pays out the MEV to the validator and then all of the stake accounts on the validator. So validators can set their own commission rate. I think if you go to, there's a retool dashboard I can share after, but it will show all of the validators running the client and their MEV commission rate. and so, you know, the Merkel route contains the information to kind of break that piece off.

That goes to the validator. The rest of it goes to the stake accounts. For liquid staking tokens that are delegating to these validators, the liquid stake, the stake pool has, it manages a bunch of stake accounts. So what happens is the pool has, you know, there's the pool, and then there's like a hundred or more stake accounts that are sitting on these validators. So in the last step I was describing where the MED is distributed to the stake accounts, there is basically the stake pool will receive the MV in that stake account. And that's pro rata to its share of stake on that validator. And so the MV gets sent there, sets a soul,

and then the pool can basically collect that and restake it. And then, you know, it kind of compounds that. and then the the MEP that goes there the stake pools have a what they call an epoch fee and this is basically a fee that goes to the treasury so if you go to gov.gito.network

there's a fee account that has Gito Sol in it and that's basically 4% of inflation and MEP rewards. So that's kind of how you know that that's a super high level picture and then how it flows back to

the treasury and then it also gets auto compounded back into the protocol as well. Okay. So that was 5% to Gito Labs, 4% to the Gito Treasury. And those two numbers are correct? Yeah. So the 4% to the Gito Treasury is just the 5% to Gito Labs is on all MEV. And then the 4% to the treasury is just on the sole that the G2S sole stake pool manages. that portion of MEV.

Understood. Okay. And then the large majority is just sent to either the GitoSoul or validators who run the GEO client, correct? So majority, I guess the majority of it gets sent to the validators, the stake accounts on the validator. And if the GEOSul stake pool is staking to that validator, then it will receive it in that stake account, which basically funnels back up into the pool. So it's not like, I guess to the Gito Soule protocol is not, like today it's not earning like an unfair amount of MEV compared to everyone else. It's basically equalized between everyone. Okay, so with the Gito client and the

MEP optimization and building the block, how, so I guess the question I really want to know is what is the value capture difference between just like staking or delegated staking your soul to a validator versus holding Gito Soul because Gito Soul captures some of the M-E-V, correct? So like how much, I guess, is it more advantageous to hold Gito Soul and how much more value do you accrue doing that versus just holding a normally staked soul? So yeah, I think the yield is pretty similar between the two. So if you go to like Salana Compass or something like that, the yield is currently roughly around 6.8, 6.9%, pretty similar to staking to normal validators.

I think normal validators are maybe a little bit higher because there's not the 4% fee, but you get some benefits as well to liquid staking. So you can, similar to like if you run your own validator on Ethereum, you might earn a little bit more yield, but there's downsides to that. So with Gido Sol, you know, you have a liquidity and, you know, you don't have to worry about the downtime and all that. Okay, so you actually make less money holding Gito Solb due to the 4% fee that you talked about earlier than you would if you had just staked your Solana directly to a validator.

But then the nice thing is, is that you can go and use your G2 soul inside of G2, inside of Solana and DFI, which, you know, if you can somehow find a way to get more than 4% value out of that. that, then all of a sudden you're in the green, correct? Correct. Yeah, there's a lot of exciting opportunities going on in Solana Defi. And, you know, not financial advice, but there's certainly ways to use that Gito Sol and other liquid-staking tokens to kind of get higher yield. Okay. And since the Gito drop, like I kind of said at the beginning, the activity in Solana has just jumped in a very, very big way. And fees on Solana have started to actually, you know, show up. Does that impact the economics of Gito Sol? Or is there kind of like a wall where that doesn't really, those, the fees and MEV opportunities on Solana, do those permeate into

Gito Soul very much? Yeah, we're definitely seeing the beginning of it. I think it's kind of the first inning. So, yeah, the MEV system has made, I think 50 or over 50% of all fees and MEV have been made in the last two weeks compared to the previous year. So there's definitely been a lot more trading activity. I think the interesting thing is that the priority fee on Solana, that has provided pretty good economics for validators, but the priority fee isn't actually passed on to stakers. And so stakers never see if without JETA,

there's the validators earning those priority fees. those priority fees can be significant. It's pretty volatile, depending on the trading activity and what bots are doing. With the MEE, you're actually, the stakers are actually able to receive some of the MEP. So I think we're kind of in the first inning.

I don't feel comfortable saying like what type of boost it will provide to yield. I think there's a lot that can change, but I do think that, you know, that potential is there in the future. Right. I guess, yeah, it's, I guess I'm wrapping my head around the fact that just the economics between Ethereum and Solan and Solana are just fundamentally different at the transaction level because, you know, Ethereum is all about passing value down to ETH stakers because it is like the widest, largest, most accessible and most decentralized part of the Ethereum blockchain transaction supply chain. So if you can like prevent MEV arbors, if the gas that they pay gets passed, uh, If the searchers bid into the block builders who bid into the stakers, well, then the stakers are ultimately the people that get it.

And so when there's more gas fees, stakers get more healed. But it sounds like that's just not the pattern that exists in Solana. Yeah. So there's, I guess there's a few ways that it passes on to Ethereum Stakers. Correct my phone wrong here. It's been a while since I looked at the Eth economics and detail. but you know there's there's EIP 1559 and that burns the the base fee it's dynamic based on usage right and that that goes to everyone not just stakers that goes to just ETH as an asset and then you have

the I think they they call them the priority is it the priority fee or the tip yeah there's the tip so yeah the tip goes to the stakers or basically the stake on that validated So yeah, it's a little different on Solana. The base fee, 50% of it gets burned. 50% goes to the validator operator. They're static on Solana at 5,000 Lamports. And then there's the priority fee as well, which 50% of that gets burned. And 50% goes to the validator operator.

Oh, okay. So wait. So is there really any difference between the economics of a base fee versus is the economics of a priority fee on Solana, other than, like, one is required and the other one is just gets you higher in the list? Today, no. I think they, I think that needs to change.

You, I think, the fact that the priority fee is burned, I think is one of the shortcomings in the protocol, but I think, you know, that's pretty easy to fix. I think priority fees have the incentive to, they can potentially incentivize like out of ban payment. And, you know, if I'm a validator, hey, I want you to pay me. You can pay me through this system where I only get 50% of it,

or you can pay me through this other system where I get 100% of it, you know, which one are you going to choose? And so I think, you know, priority fee, I imagine, I don't want to speak for the core engineers or the foundation or anything, but I think that will probably get changed pretty soon here to where the validator keeps 100% of the priority fee.

Well, to me, that is exciting because like I said at the start of this episode, I think the economics question, the economics conversation of Gito is the most interesting one. And I think the most interesting thing about Ethereum was the arc of its economics over time. Like I got into Ethereum when the economic,

the monetary policy was five ether was issued per block and that was it. And then we got to watch it go down to three and then we watched it go down to two and then we saw EIP-1559 become merged and then we saw proof of stake happen and it was like one of the most fascinating story I said I think was just ever to like unfold in the crypto space and so if you're telling me that there's like a bunch of conversations about the future economics of soul I certainly think that that's a pretty fascinating conversation where do those conversations get held what are the state of

these conversations if people like me are interested in following along with those conversations Like where what would I tap into it in order to do that? Yeah, there's a lot of the, a lot of the conversations are happening in Discord in the, there's a Salonatech Discord. There's some happening in Telegram. It's kind of, it's decentralized, pretty decentralized right now. So there's a lot of conversations happening in a lot of different places.

I think ultimately people are trying to kind of get back to the forum as like a single place to discuss these ideas. So you're seeing, I think we'll start to see that happen pretty, soon as these like ideas materialize into more concrete ideas and implementations. Another place that you're seeing these happen is there's a there's a SIMD repo. It's a Salana Improvement Proposal or Salon Improvement Document repository. And you're starting to see some, you know, it's that's kind of a place for these like large protocol changes that need to be coordinated between a lot of.

of different stakeholders. We're starting to see more conversation happen there. So there's, if you look up the Salana, Pra, PR, A, W, in the SIMD repo, there's a ton of discussion in there. It's kind of a alternative path to some type of dynamic fees to charge users and bots. So there's, yeah, there's some conversation happening there. But yeah, I know. I think there's, you know, no system's perfect in its economics, at least at the beginning. And I think there's a ton of flexibility in the Solana Protocol. You know, we were talking about the different accounts that you have to specify up front that you're going to modify. And you can run a lot of these transactions in parallel.

So, you know, there's potentially some ideas are to run like an EIP type mechanism on each account. maybe you run it per program. There's a lot of flexibility. I think, you know, it's going to be. Yeah, yeah. So there's going to be a large opportunity to, like figure this out. And I think, you know, it's going to be like hurting cats for a little bit.

I'm pretty confident the community is open to change. And I think Solana, one of its strengths is taking feedback and implementing it pretty fast. And I think we'll see that happen. and hopefully in 2024. Are you launching a token? Is it already live? How are you managing the legal and tax for providing token awards for your team?

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tokens. But SELO is a community governed protocol. This means that SELO needs you to weigh in and make your voice heard. Join the conversation in the SELOFORUM. Follow at SELOORG on Twitter and visit sello.org to shape the future of Ethereum. I think with that bit of conversation right there, we start to open up the rabbit hole of Solana governance because now Solana governance is a conversation because there's new clients of Solana and when there are multiple clients of Solana all of a sudden what

Solana is is no longer determined by one single client hence because there's multiple of them and so who says what Solana is is now a governance conversation but I want to leave that at the very end of this podcast in order to get there I actually want to talk about the decentralization of Gito because that is a microcosm of the decentralization and governance of Solana so I'll have to start with with Gito first what is the long-term plan for the decentralization of Gito. Yeah. So the Gito Foundation just released the governance token, JTO, allows the token holders to

participate in governance. And the Gito network, as we've kind of gone over, there's, has its hands in a lot of things. And, you know, I'm like pretty excited to see people participate in governance here. Right now it's the governance control is the stake pool. So there's some fees associated that governance can vote in. You know, maybe governance wants to drop fees. Maybe they want to lower fees.

You know, you can put these proposals up at forum.gito.network and, you know, get some input there. There's 240 million JTO tokens that governance controls. So that can be used in, you know, any way that token holders please. and there's a few other parameters as well. I think, you know, we'll probably get in, probably saying a lot about StakeNet as well. Stake net will be the way that, assuming that governance votes it in

will be the way that the GitoSole stake pool runs. And there's some parameters in there that, because it's an open source delegation strategy, token holders can actually change the way that the stake pool runs. and it all happens on chain. An open source, let's unpack SteakNet really quick. An open source delegation strategy.

What is that and why is that important infrastructure for Gito? Yeah, I think it will be like the most, assuming that the Gito token holders and governance vote to kind of transfer the running of Gito sole stake pool to StakeNet. I think it will be the most decentralized stake pool in existence. basically what StakeNet is is an open source delegation strategy

that runs on Solana and so basically anyone can contribute to running the stake pool if it's if it delegates that authority to stake net

so I think today or the data filming we just open source to a piece of stake net which is the The first component is the validator history program. Basically, the validator history program is using Solana as a database for validator performance metrics, which I don't think has ever been done before.

So basically, you can see how well the validers voting, their history of commission. You can see, like, when they're changing their commission rates, how well they voted in the past. You can see what version of client they're running. You can see the client type. So you could see like Salana Labs, Jada Salana, when Fire Dancers out, or the ZIG client, that will be stored in there as well. And there's 512 epochs worth of data, which is several years of data. This data started getting collected on September. So there's actually like a few months of data in there already.

And so, you know, this is one piece of the program. There's a lot of other features that I look forward to contributors contributing to, like block production quality. There's this big issue or like challenge of how do you figure out where a validator is located in the world. And yeah, there's a bunch of other cool things I'm sure people will come up with to add to StakeNet. And basically this is like the source of truth for all validators on Solana. And then there's going to be another program, which will be released in the near future. And basically it will reference that data to operate the stake pool. So all of the delegation logic and parameters for controlling stake pools will live on Solana.

So basically, you can write math. It's like, hey, I want to look back six months. How did this valetator do? How to do compare it to everyone else? So, you know, you can score all these validators on chain. And then you can write the logic to basically say, oh, like I have this stake delegated, this valetor and this one delegated to this validator. you know, this one's doing better, so StakeNet can basically take the stake off that valetair and move it to a different one.

You can expand the size of the stake pool. I think, you know, the possibilities are kind of endless, but I think the main goal is like putting all the delegation logic onto Solana, using Solana as this like database for validator history. And essentially, yeah, just putting all the logic on chains so that Gito Sol and other stake. pool as if they adopt it can live forever. The way I kind of see StakeNet from what you described is kind of like the brain of GEDO where you're, since Solana is a, you know, a system that you can put data on, you're taking all the data about the state or health of Solana validators that are part of the GEDO system and putting that on chain so that StakeNet can consume that data,

evaluate the G2 validators, and then load balance or, you know, determine who, gets what stake as determined by the StakeNet algorithm. Uren is a system in DFI, an Ethereum DFI that optimizes for yield with different strategies. And it kind of sounds like that's kind of similar. It can be kind of similar where we can like load up a algorithm, load up some strategy into stake net that load balances across all GEO validators into an optimized fashion. And what does it mean to be optimized? Well, that's up for Gito governance to determine.

Is that a fair way to articulate this? That's a perfect way to articulate it. A lot of the, basically all the data that StakeNet uses, except for like one, I think there's one piece that isn't available on chain. All of it is copied from, backing up, I guess, a lot of the data that we're referencing is in what's called a vote account. And a vote account lives on chain. If you remember, you know, there's been some stupid fun.

the past from like the Salana non-vote versus voting transactions, you know, people are saying a lot of transactions are vote transactions. Well, yeah, votes are transactions. And the state of how well a validator's voting is actually stored on chain. And those transactions reference that. So what StakeNet is doing is basically, there's a, there's keepers that anyone can run. and when you crank this program, it will basically copy the vote account into StakeNet. And so StakeNet is basically checkpointing this data periodically and storing historical analysis of it. So it's not like there's like a centralized party that's like you need to like trust to like upload this data. It's like this is actually like you can look at the code.

It's all open source. It's copying this data on chain. There's a few things that aren't available on chain. and for that we're actually using data available on gossip. So all the Solana nodes are gossiping with each other. They're not actually transactions. They're just kind of like packets. And in order to gossip those transactions,

it's every validator signing that transaction with their key. And basically, you know, you can say, oh, Lucas's node said that their IP is this or they're running this version. And we're actually taking that gossip data and uploading it on chain and signature verifying it on chain. So all the data in StakeNet is, it's either signature verified or it's copied from the actual voting accounts on chain. So it's very like high quality trusted data. And yeah, basically like if like the GTO token holders want to adopt StakeNet, they can and all those data is available on chain.

So I think, you know, my personal opinion and like vision for this is like people start to like explore this data more. And they look at the, you know, there would be like a current like V1 delegation strategy where it's like, okay, this is kind of like a first pass at what this looks like. It's very simple, reliable work. But there's going to be opportunities to tweak that. And all that data is available on chain. So I think this is going to kind of encourage people to get more involved in governance, take a look at this data. There's probably going to be some like data science people that are like looking at all this data and being like, oh, what if, you know, what if we tweak the algorithm a little bit this much? we can, you know, expect G2Sull API to increase this much? Or, you know, what if we look at the locations of all these validators and, you know, tweak the locations of all of them to kind of spread it out? So I think it just opens up a lot more possibilities and a lot more people to get involved in the operation and governance of the G2Sole stake pool. And the reason why we like this product, this component of the G2 system StakeNet,

is that because we prefer things to be governed by code. And so we have this like code, this open source code system to be a manager of the Gito tech stack. And the only way that humans get involved is when like somebody is writing an alternative version of the code. And then they show everyone else in the G2 ecosystem. Like, yo, guys, look at this code that I wrote. It's better than the one that we currently have. I propose that we merge it and that is the new code that governs. But ultimately it's code that governs.

And humans only update things when they, decide that they have better code. For sure. Yeah, I think that's super important because all StakeNet lives on chain, I think you can have StakeNet interact directly with governance. So you can build your own governance platform or potentially have a reference realms and actually have it be, the stake pool can be directly controlled by governance, all on chain, minimal human coordination there. I think that's like a really cool idea. So yeah, I'm super excited about it.

Would you say that that's the main governance lever or vector inside of the Gito system? Or is that just a pretty big part of it? But there's other things that are relevant to Gito governance as well that we need to discuss. I think that that will be a main piece of governance moving into 2024. I think there is some more flexibility with stake pool fees. So token holders can kind of look and do more fee math if they want to and, you know, figure out if the fees need to go up or down. I think there's also, you know, the 240 million GEDO tokens that the, if you go togov.goto.network, you can see those. They're in the treasury.

They're controlled directly by token holders. So token holders can kind of find creative use cases for those tokens, put up proposals, get them to pass. kind of take the control Gita network into their own hands. All right. And now Gito is a part of Solana governance at large. So there's Gito governance governing Gito, but then there's Gito that has its share of Solana governance. Lucas, can you talk about just like why Solana needs governance and where Solana is in

its own internal governance conversations? for somebody who's not totally familiar with this state of things. Like, what should people know? Yeah, I think, like, up until this point, I think there's been a few parties involved with governance on Solana. And, you know, similar to Ethereum, you kind of have, I don't think, as far as I know, there hasn't been any, like, Ethereum votes. There's kind of like this, like, soft governance going on where, you know,

they have core devs and the client teams and, you know, you have the stake pools are kind of involved, maybe not directly so much yet, maybe in the future. There's basically, there's a ton of stakeholders involved. I think on Solana, that's starting to grow or you're starting to see more stakeholders get involved. So, you know, I think it'll play out pretty similar. I think it's probably in like the second inning of getting to more decentralized governance right now. So I think, you know,

I think the community is starting to take more control. I think the client teams are starting to get more involved like Gito Labs and Fire Dancer team. There's been kind of some of the independent validaires are starting to push

for governance more. There's actually a vote on Solana in October. And then I think you might have been there, but there's at the, at break point there was a community conference that was held that was kind of talking about governance. So I think like there's definitely a lot of room for improvement there. We're definitely starting to see more progress on that front. And I think that will continue to develop into 2024 and beyond.

Yeah, I was at that one panel about Solana governance at breakpoint. And it seemed just pretty obvious to me that these conversations, people weren't used to having these conversations and they didn't know how to think about these conversations. And so, like, it's just, I think the Salonan community at large, like learning about a vector of what these crypto economic systems are, that it's kind of like ignored for a while because like Salonid, there's like all the hardware engineers, all the low level, low level engineers. And so like these governance conversations are like these new things that everyone's kind of like, what are these conversations? What do we do with these conversations? And so it kind of seems like everyone's kind of figuring it out as they go.

Is that kind of the vibe? Yeah. I think there's definitely, I think it's still pretty early in Solana governance. I think there's a lot of opportunities to learn from other ecosystems here on what has worked and what hasn't worked. There's a lot of governance experiments going on. And then there's some, you know, pretty long. running governance procedures on things like Ethereum and Cosmos or lack of governance in some cases. And so I think hopefully, you know, the Salana community can kind of like use those as case studies. You know, when you, if you take like a business class or something, there's like all those case study documents that you read. It's like, oh, this is why this business succeeded or

failed. And, you know, here's some key learnings there. I think that's super important. important. I don't think there's no need to like invent the reinvent the wheel here. But I think that there is like, you know, there's a lot of experiments that have kind of run or a lack of experience experiments that have happened. And you can kind of see what happens there. And I think that I'm hoping the Salon of community and the stakeholders involved will kind of look at that as a reference. Well, Lucas, I've learned a lot in this episode. So thanks for coming on bankless and teaching me and a lot of the listeners all about Gito and Solana, just like zooming all the way back out.

I think most people ask these questions at the very beginning, but I'd like to ask them at the very end. What got you started with Gito and of all of the ecosystems that you could spend your time on? Like, you could have been on Ethereum. You could have been in Ethereum layer twos. You could have been on Avalanche. You could have been on Cosmos. But you chose to build Gito on Solana.

Why? I really resonated with Anatoli and the team's vision on Salon. I come from a computer engineering and firmware background, so working in like pretty low-level C-C-plus-plus code on like very resource-constrained devices. I love making code run faster. I love making code use less resources. It's like what I went to school for.

I did that for several years and worked in robotics before working at Gito. And I think that this like high-performance state machine and trying to use memory and the research, resources available the most efficiently as possible really resonated with me. And I dove into my first foray into Solano is the, I think it was the March 2021 hackathon and built a project there and really just kind of like I did MEV on Ethereum before starting GEDA and that was kind of my first like introduction into programming and interfacing with chains. Learned a ton there and then switching over to Solana.

It was pretty rough at first. There wasn't that much documentation, but I really just, like, fell in love with the process of, like, you know, they used to call it chewing glass. I think they kind of moved away from that at this point. But the chewing glass meme used to be a real thing. And I love that. And, you know, just kind of interacting with the chain

from like a programming standpoint. It was just super cool. So, yeah, pretty excited to see the, like, Solana community of lean into that. I think, you know, they're really, like, diving headfirst into that high performance efficiency with fire dancer i think you know super excited to see how that pans out in 2024 and beyond do you have any perspectives as to what the ethereum community or outside of salana communities or i don't know the eth maxi podcaster is what

they don't understand about salana or what they misrepresent about salana the most I think the centralization narrative of Solana, I think that's massively overblown. I think there's like thousands of validators running on Solana all across the world. And so I think from like a server and like geopolitical and geographical standpoint, the network is extremely decentralized. I think that my personal opinion, is that like running nodes at home is a little overrated.

I think that running in data centers is probably fine as long as they're kind of like spread throughout the world. You know, maybe with Firedanceer and more efficiencies in the protocol, you will be able to run salon a node at home. But I think more importantly, like, just like ultra-fast, super fair, super cheap state machine is like the most important goal here to like really unlock access to these, this technology and these services to anyone. And so I think that's, those are some things I think maybe there's like some disagreements there with the Ethereum community from Solana people.

Sure. Interestingly enough, I'm actually about to have Anatolia on the podcast later today in about an hour actually. And I'm going to ask him the same question. But I'll ask it to you as well. But it'll be a question in the form of a monologue, if you will. So spare me. Nick Carter once upon a time on an episode that I was listening to on his podcast. This was right after OFAC banned Tornado Cash. And Nick Carter is a famous bitcoiner. And he said a line that kind of stuck with me is that like this kind of shows that Ethereum is actually the spearhead of the crypto movement in and trumping Bitcoin because Bitcoin didn't really have this, it didn't offend the nation state in this way because. You can't do tornado cash on Bitcoin.

And if Ethereum is pushing up against like the Treasury and FinCEN and all of these things, it kind of is proof that Ethereum is doing something right because it is, it has teeth, right? It has claws. And then after as a result of that OFAC banning of tornado cash addresses, there was a big movement inside of the Ethereum blockchain supply chain when it comes to censoring tornado cash transactions. And then websites like M-EV-Watch.com, I think, spun up and you could see like the red and the green of the blocks that were being proposed that were banning OFAC transactions or weren't. And for a while, the number of censoring blocks crept up to like 80 to 85 percent. And then it's been down only ever since. It's somewhere around like 33 percent now.

And I think that conversation has spawned a lot of – that is one of the most impactful things that's happened in crypto to this day because it's really about like, oh, crypto's getting so large. that is going up against the largest powers that exist. And I think when we can go back and forth about how decentralized Solana is, but I don't think, I think the real test will be like, does Solana produce something that offends the nation state to that level of degree? And I think using that as an acid test is like, well, it's great if we have geographically distributed Solana validators. But what happens when some tornado cash alternative look alike

is built on Solana, and the Solana ecosystem has the massive amounts of success that all the Solana community wants for it. And if it does have that success, it will attract the Lazarus group. It will attract hacks. It will attract North Korea playing around trying to do the things they've been doing on Ethereum for the last four years. And so I think my question to you is, do you think the Solana community, the Solana Tech Stack, is ready for that? I think it is. I think there's a lot of there's a lot of validators that are outside of the U.S.

And so, you know, they, validators can kind of make their own choices. You know, people have different opinions on whether they should respect the rules of the U.S. government or not based on if they're in the U.S. or not or other personal beliefs. And, you know, people can have that. I think that there's enough stake outside of the U.S.

to where if it was an issue, then people might have a little more flexibility. I think a lot of this also revolves around the way that PBS has kind of shaped up, especially with MEV. And you kind of got around to this in the MV transaction supply chain. This is actually one of the major learnings that we had. And I think maybe like, I don't know if like FlashBots predicted this or not, but it's been a really good learning experience in the way that our system works in the architecture.

And because we're actually building partial blocks on Gito, the Gito block engine doesn't have the same issue. And it's kind of up to validators if they want to make that decision or not. So I think from that angle, that was like a pretty powerful learning experience. I think, you know, outside of that, I think it will definitely stress the network. I think anything of that magnitude, ultimately you want to be a super successful network. network. And like you said, like, or what Nick said, it's like at a certain point, you become so successful that you start attracting attention from the government. And so that, you know,

if Solana is successful, it will have to deal with these issues. And I think it'll be pretty hard. But as we were like mentioning earlier, I think there's, in the governance conversation, I think there's a lot to learn from other ecosystems here like Ethereum. And so I think, you know, Hopefully the Salana community can take some of those learnings and apply it to any hardship that it has in the future. Well, Lucas, I wouldn't wish the ire of OFAC on any ecosystem, but also I kind of do because it means that ecosystem is doing extremely, extremely well. And it is kind of like the final boss and the more chains that we can go battling the final boss, the better. So in some weird sick way, I do wish the Solana ecosystem well in its endeavors in order to get to that point. Lucas, thanks for coming on bankless today.

Just one last question for you. Gito metrics and dashboards and maybe Solana metrics and dashboards, if listeners want to just look at Gito, what websites can they go to to go check this thing out? Like what websites or metrics or dashboards do you frequent on a daily basis? Yeah, so one of my favorites is the Gito bundle Explorer. So that's explorer.glo.w.tf. you can see all of the bundles that searchers and traders are submitting.

Super cool to see like, you know, it's doing over 100,000 bundles a day. So there's a lot of cool information in there. Another one is there's some Dune dashboards. Can share you the link, share the link with you after. There's someone that works at Dune, Andrew Hong. He's been helping out a lot on the Salana dashboards. And so there's some Gito Sol specific ones. and then another favor one that recently popped up is the 21 Co released a dashboard on Salana Key Metrics.

So, you know, it shows the volume and the price and a number of user transactions and fee burns and all that stuff. So, yeah, big fan of Dune in the Gito Bundle Explorer. And then actually, I guess now that we're filming this, I think it'll be released later this week, there's actually a Gito StakeNet, kind of like a V1 UI. So you can go to, let me see here. I think it's a Gito.net network. I want to say it's slash stake net. And you can view a lot of the StakeNet stats there.

Well, Lucas, we will get all of those links in the show notes for the bankless listeners. Lucas, thanks for coming on, my man. I learned a lot. And like I said, the economics conversation around Salon, I think it's going to be a very interesting one to track, especially this bull market while Salana gets new levels of stress testing in terms of just like numbers of transactions and users and all this kind of stuff. So it's a sonic success. It's the sign of health, Lucas, you've been putting in the work throughout the bear market.

So congratulations on getting to this point. And I wish you well, my man. Thank you. Thanks for having me. It's a pleasure. Bankless Nation, you know the deal. Crypto is risky. Ethereum's risky.

Salon is risky. Tech stacks of this nature. Oh, risky, you can lose what you put in. We are headed west. This is a frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.