Bankless - Vitalik Buterin: Ethereum For The Future

Episode Date: September 19, 2023

Vitalik live from Permissionless! On this Episode we discuss what's next for Ethereum. What type of use cases can we create because of the unique properties of crypto? What would Vitalik's new startup be? And we explore what it will look like to successfully navigate the next bull market. This episode was filmed at permissionless. For the full episode in video form, check out the recording here: https://blockworks.co/event/permissionless-2023/livestreams?room=37736  ------ 🎁 Check your wallet with our brand new tool: Claimables  https://bankless.cc/GetClaimables  ------ 📣 AAVE V3 is Here! http://app.aave.com/  ------ 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  ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle  ⁠ 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap  🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku  ----- TIMESTAMPS 0:00 Intro 6:12 Improving Existing Things vs Building New 16:55 Has Vitaliks Expectation of Ethereum Changed? 30:44 Where Would Vitalik Start a Startup 36:27 What Fear is Being Missed? 47:20 Navigating the Next Bull Market ----- RESOURCES Vitalik: https://twitter.com/VitalikButerin  ----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠ 

Welcome to Bankless, where we explore the frontier of internet money and internet finance. And today on Bankless, we're exploring some new frontiers about the future. I think quite frequently in the Crypto Web 3 and Bankless content sphere, when we talk about the future that crypto brings, we use frames of references from the past, TradFi, to talk about the future of finance, Defi. We want to fix Web 2 with Web 3. But today on Bankless, I want to bring this conversation that we had at Permissionless with Vitalik. the final day, day three of permissionless that we had with Vitalik, that we called Ethereum for

the future. I think it's very easy to imagine use cases like Defi, like Web3, like NFTs, when we have previous correlates to understand, as a frame of reference to think about what a new form factor for these things could be. But what about the things that Ethereum can produce, that Web3 can produce, that don't have a historical form factor? What about the new use cases, the net new things that can emerge because we have the new properties of what crypto can bring to the table. This is the theme of this episode and the conversation that I had with Vitalik Buteran. The sibling technologies, AI, decentralized science, synthetic biology, lots of the things that happened and went down as Zuzalu, but really just as a meta theme of understanding the new

things that will come out of crypto, the things that we can't articulate. I ask questions to Vitalik like if he could duplicate himself and start a startup, which industry would he start it in and how would it relate to crypto? What does he want the Web 3 builders of the world to focus on that they might be under-indexing on because imagining an unspoken future is hard? How will Ethereum be a platform for all of these new future use cases that we can't yet imagine? And knowing that Vitalik has gone down these rabbit holes of different industries, different technologies, how has that exploration changed what he thinks Ethereum can do for the world? Like I said, this talk opened up the third day at permissionless where a lot of people's minds and imaginations were already opened up to some of the

future things coming into the crypto world. We have the Solana virtual machine. We have 4844 and scale and dank sharding and we have account abstraction and EIP 4337. A lot of things that can really make the future of Ethereum tangible from a technical perspective. And I really wanted to bring this conversation to the forward with now that we have this technology, what can we do with it? And can we imagine some net new things rather than just reimagining the old things. Reimagining old things, definitely why we're here. But there's also going to be some nice surprises that we won't be able to articulate. And hopefully, bankless listener, this conversation with Vitalik from permissionless can open your mind's eye as well. So let's go ahead and get right into this conversation with Vitalik Bueteran.

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Join the conversation in the SELO Forum. Follow at SELOorg on Twitter and visit cello.org to shape the future of Ethereum. So thank you to all the sponsors that support bankless and all the podcast editors, newsletter writers, and operations managers who make the bankless organization the best that we can be. We truly appreciate your support and for all the listeners out there who listen to the mountains of content that we turn out each week, especially this one right here. So let's go on. Ladies and gentlemen, I would like to introduce you to Vitalik Buterin co-creator of Ethereum record holder for the largest ignored EIPs to date and also a travel blogger Vitalik. Welcome to Permissionless.

Thank you so much, David. Good to virtually be here. Cheers, cheers. So I want to open up this conversation, this day of permissionless, with a new perspective that I think it's hard to, get a grasp on. When someone goes down the crypto rabbit hole, when they become educated about the power that crypto has to bring to the world, is usually through a lens of discovering newer and better ways of doing things that we already do. D5 replaces TradFi, stable coins over bank transfers, ENS names over Twitter handles. But I want to open up a new conversation because,

I mean, all of these things are very exciting and they're very, very powerful. But I want to open up people's imagination to the potentially new things that Ethereum can unlock for us, that we can't readily imagine because we don't really have preexisting models for them. How do you think about the balance of these two things between improving preexisting things versus crypto enabling net new things that are harder to imagine? As an industry, would you say that we are under-indexing on new things? I'd say so. Well, let's see if I can try to think about the question,

more deeply because there definitely are like lots of very new things that the crypto space is doing. But sometimes I also feel like even those new things are in some ways and not imaginative enough. Right. Like, let's see. What kinds of things have, has the space done over the last few years? I mean, it's it's done defy. And defy is cool. And I've, you know, traded my fair share of various tokens on Dexas.

but it's still just like one tool in a, you know, in a workflow that still kind of looks pretty similar to what it would look like otherwise. There's, you know, NFTs and NFTs are, I guess they're new. They're new. They, yeah, I mean, like, are an extension of something that has a history, which includes, you know, like art collectible. It includes video game items and it includes all kinds of things. though, of course, every new version of that kind of concept brings something totally new to the table. There's, I mean, just, you know, like, using crypto for payments in general, which is good, but it's payments. So I guess so far, like it feels like the thing that all of those examples have in common is that they're like individual pieces and individual pieces that are designed to like fit into an ecosystem.

that's otherwise the same as before. And the thing that we haven't been as successful doing yet is, like, creating a new ecosystem that actually has, like, different pieces of it that makes sense in the context of all fitting into each other, right? Like, basically, yeah, something that's more holistic. And I think this is one of the reasons why I've been excited about decentralized social, for example, right? Like the, I mean, right now, it's interesting and that I think it's made more progress than I expected, I mean, already. Like, I think I've been, you know, like seriously afraid that we would just have, like, you know, like, 892, like, cypherpunk, I mean, like, crypto anarchist geeks, and then it would just kind of stop there. But, like, if you look at Farcaster, for example, like, it's actually pretty successful, right? And, I mean, I know there's, I mean, like, Glens, which is, you know, like, continuing to do well.

There is a bunch of others. And, I mean, obviously, yeah, I mean, like, there's the whole situation that happened at Twitter itself, that kind of created room for all of these alt-twitters to grow. But the thing that I noticed about these is that they have a unique selling point, which is that they are an alt-twitter that totally does not have an reactionary identity, right? So it's, it totally does not have an identity that's about, you know, like Musk bad and we have to rebel against Twitter, right? Now, you know, obviously at the same time, there's none zero of that by definition, because if there was exactly zero of that, it'd still be on Twitter. But it's, like, it's less about the bad and more about, like, hey, you know, we have crypto tools and, you know, like the centralized platforms are not doing these things. So let's like actually take crypto tools and let's see how far we can push things in that direction, right? So it's been successful in that way so far.

And like Farcaster, for example, seems to like actually have a pretty cohesive community that's like lasted for a pretty long time. You know, it's not just like a couple of geeks get in there for a couple of weeks and then I get back. But what I see where I see the longer term future here is that like it really can plug into all of the other stuff that we've been doing as a space. Right. So like, for example, at scale, a social network. needs to have some form of anti-civil, right? You need to make sure that the, you know, the 894 likes are 894 people and not 894 accounts that are all controlled by the Kremlin.

So the problem there is like all the existing way of doing all of that stuff is like very centralized and very anti-privacy preserving, very hostile to, you know, like suits and an ons. And, you know, it is dependent on infrastructure that, is despite the whole meme about how centralized stuff is more secure for normal people, is often actually less secure than advertised, as I discovered yesterday. So actually, yeah, having more decentralized options for anti-Civil, also more decentralized options for account recovery, more decentralized options for incredibly identifying whether or not a person is actually part of some community.

Like these are all things that the crypto space itself can do, right? Like we have eth addresses and ENS just as like a very simple basically of proving that, you know, like you spent at least like $10 to be willing to post this. Then we have obviously, you know, like proof of humanity and circles and like all the various proof of personhood things. We have popes. Then, you know, this year at Milok Azulu, we also worked on zoo stamps, and zoo stamps are basically like folks, but there's zero knowledge. For social recovery wallets, like in Farcaster, you can set up an Ethereum account as your recovery method. And then, you know, that Ethereum account could be a smart contract wallet. And, you know, you can totally buy yourself if you want to, like set your recovery account to be a, you know, to be a gnosis.

is safe, right? And, like, actually, yeah, I mean, like, do the social recovery thing yourself. So there's just, like, all of these tools that are really, yeah, starting to plug into each other or really have the potential to plug into each other in a serious way that, like, actually, yeah, builds on top of each other. And, like, the big dream here, I think, is to, like, really create an independent, open tech stack, right? And so, you know, think of how, like, there's the conventional tech stack where, you know, you know, you got your phone numbers and you got your Google and, you know, you got your Twitter and, you know, like all of all of those things. And then, I mean, as an analogy, like, you know, like China has an independent tech stack, right? So, you know,

you got your, you know, your WeChat, you got your AliPay. You know, you've got your increasingly the CVDCs. And it's kind of, you know, like very sort of independent of that first one. And then And what I think crypto could do is like do an independent stack, but going, you know, in the opposite direction, right? More decentralization, right? You know, you have your Ethereum account. You know, you have various proof of humanity protocols, various, you know, various popes and, you know, like, Gitcoin passport and other kinds of anti-civil protocols.

I mean, you have your reputation. You have your, you know, like different kinds of recovery methods. And like everything actually works together with each other, right? And like, I think it's also important to have the part of the crypto space that just says, hey, you know, you can keep everything else. You just keep one thing. But I think the holy grail would be to try to create an on ramp, right? It's like, if a new person joins crypto for the first time, then like, fine. You know, they can create an Ethereum address, which is basically controlled by a Gmail account or whatever.

Right. But then they always have the option to take that smart wallet. And like, especially if it's a 4337-spart contract wallet, right, you'd be able to upgrade it, change the logic without changing the address. And instead of being, you know, like, backed by a Gmail account becomes maybe backed by its own key or maybe becomes backed by multi-sig. And then eventually you sign on to skiff and then you've done the reversal where instead of your Ethereum address being backed by your Gmail, your email becomes backed by your Ethereum

address, right? And like basically, yeah, you know, give people the opportunity to kind of, you know, like, slide down the decentralization ladder, and at the end of it, like, really, yeah, properly be in this Minogue totally independent stack that actually, yeah, and Minogue works together with, between all the different pieces inside it. So I think, like, actually realizing that vision would be super cool, and I feel like we really have tools to actually do that in a way that totally did not exist even one year ago. So, yeah, I mean, that's one of the things that I'm excited about. Yeah, I think to summarize what you were saying, we have a lot of tools in the year

2023 in Ethereum. The tools that you talked about like that helps support Farcaster or the tools that help support the experiment at Zuzal with Zupass. And so I think what you're saying is like a lot of this stuff is kind of ready to go. It's just a matter. It's just a matter of fitting these pieces together and also fitting these pieces together inside of newer context. And one context that I see gaining a lot vitality these days is the decentralized science movement. And this was a subject that had, you know, an entire week of focus at Zuzalu during those two months at Montenegro where there's just a bunch of learnings and lessons from crypto-adjacent technologies, like decentralized, like I said, but AI, synthetic biology, longevity, were all there. And my biggest takeaway from that time was

that all of these things, like I said, are crypto-adjacent. And so post-Zalu, post just being able to gather all of these different knowledge from different industries and different leaders coming to, you know, expals what they're doing in the world of synthetic biology. Has your perspective on Ethereum and what it can do for the world and the future industries like I just listed, has your perspective on what Ethereum's role is changed at all? I think it's definitely, yeah, evolved quite a bit. Like, I think, I mean, the biggest change that's happened for me over the last 10 years is just, you know, a slow grind from going from very abstracts to being very concrete, right?

Like, if you think about the original vision of Daos back in 2013, it was like very hazy, right? It's, you know, hey, you know, we can have these automated corporations and, you know, the automated corporations, like, what kind of logic they actually have inside of them was just like totally unclear. Lots of things were unclear. And today, like on, I mean, like, every single. level of, I mean, look, both the crypto space itself and the space of things that are

adjacent to crypto, like it's starting to become more specific. So I generally view the role of the space as having a few different prongs, right? So one of them is just as an alt system for people for whom middle of the traditional system is either unavailable or to a oppressive or, you know, like has other disadvantages, right? So if you think about people just like wanting to hold and spend money in countries that have totally, you know, like broken currency situations, if, you know, you think about people in, you know, like various kinds of oppressive regimes, just, you know, like wanting to be able to hold and save up money and, you know, like to do that in a way where it can't, you know, just like,

arbitrarily be seized from them once, you know, like some, you know, like, random um, you know, like surveillance system decides that you're suspicious enough, right? Um, it's, uh, and I think like in a lot, or even just, you know, like people in, um, you know, specific industries that are not kind of served well. And like in this case, I'm, I'm, I'm not even talking about like anything regulatory. I'm talking about like things that intermediaries like PayPal don't like, right? Like there's a pretty big, you know, like set of categories of those. There's lots of people, mostly, yeah, I'm going to like in emerging economies, but even, I mean, like, some in places like the United States that are, you know, like unbanked or functionally unbanked in various ways.

And like not in the, yeah, I mean, like, cool hipster unbankless by choice way, but even in the like, I have a hard time getting a bank account if I want to way, right? So there, so that's the first prong, right? like an alternative for, you know, like people who really need it. The, yeah, second prong, I think, is as a kind of laboratory for testing out new kinds of mechanisms and ideas where they can first be, you know, like really tested and deployed within a dedicated community that is just excited about these kinds of ideas, but then kind of trickle up into the wider world in various ways, right? And I think in that case, things like some of the Dow experimentation that we've been doing would be, you know, one good example, things that are being done inside of things like forecaster, things that in the ZK space, right?

So Zupass would be one good example, right? Like these are all areas of technology where we can experiment in them within our own. you know, decentralization, there's a gas community, but then there's, like, ideas that just inevitably are going to, you know, kind of trickle up into the wider world in,

you know, like all kinds of sometimes direct and, you know, like, sometimes subtle ways and, like, basically set in example or a standard that a, you know, like, more, more open,

more credibly neutral, you know, like more, you know, like, more, you know, like, decentralized and, you know, like, more, like, local sovereignty favoring world, actually as possible. And basically create a prototype that actually shows how that sort of thing can be done. And then in terms of interaction with some of these adjacent spaces, I think it's, to some extent,

it's some of both of those two things, right? Like public goods funding is definitely an example of, it's like a very specific use case of the thing that you would call Dow governance, right? In some ways, it's the same problem because it's basically the problem of making a, you know, decentralized decision and making mechanism. But public goods funding does have like a few specific traits that make it worth, I mean, you know, thinking about as being its own sector in some ways, right? Like one, one example of this is that I think a kind of radical decentralization of decision making makes more sense in public goods funding than it does in many other kinds. of Dow governance, right? Because it's the convex versus concave thing, essentially. You know,

if you have a Dow deciding to, you know, whether or not to make its website, like, circular, make it square, and then you 50-50 compromise it and you get like a square with rounded quarters, like that's not necessarily better, right? Like, it's, you know, like those kinds of compromises often just end up being worse, right? And there's, you know, there's a case to be made that, like, there's particular types of decisions where what you really wants to do is it really wants to, like, pick a decision that can be made and executed on by, like, very deep thought by, like, one person or a few people. And, like, sticking to one of those visions is better than trying to, like, awkwardly 50-50 between everyone's, right? But in public goods funding,

I think that happens less often, right? Like, giving $10 million, each to 10 different projects is like pretty most of the time better than giving $100 million to one project, right? I mean, there might be exceptions like, you know, if you want to go to Mars and then giving a billion dollars to one guy is better than, you know, giving like $1,000 each to a million guys, right? Because if you do the second one, then like literally none of them have any chance at all of making it. But like on average, it's a problem that's more amenable to that way of doing things, right? And in the D-Sy space, I think the framing it as a problem of just creating more diverse kinds of funding mechanisms to decrease the chance that something important gets completely passed by is probably the correct frame in a lot of ways. And it's like what we see is, I mean, we have government as a funder, but the government is often, you know, despite all of the econ textbooks talking about it as being, you know, a necessary funder because, you know, free markets won't do it alone. It's like often a pretty

negligent funder in its own right. Like, yeah, you know, like in the case of like even COVID research, for example, like the amount of money that has actually gone into it from governments is like surprisingly tiny given the importance of the problem, right? And there was like a big push in 2020 with operation of warp speed and, you know, sometimes a crisis can galvanize people into action and that was heroic and that was good. But then basically as soon as, you know, the first batch of vaccines and other things actually came out,

it just kind of, you know, petered off. And like, basically, yeah, like, it feels like a fatigue that a lot of people have where they're tired of being like forced to do various things to deal with COVID, which is very understandable, has like also turned into this much more

nonsensical fatigue. against even, you know, like various quiet institutions, like continuing to spend even, I mean, like, smaller medium amounts of resources dealing with the COVID problems that are still around and that are still important. So it's, and like, basically, I mean, like, there's a big funding gap, like even there, right? And then on the, yeah, I mean, like longevity and anti-aging side, I categorize that as what I call an entrepreneurial public good. Right. So the thing that markets are good at, is they're good at entrepreneurial goods, like goods where you need someone with a vision to, like, build the thing. And most people are not even going to realize how valuable it is until after it's already made, right? The stereotypical kind of, you know, if you ask the Democratic focused group, what they wanted out of a phone in 2006 and none of them would have given you an iPhone thing. And then, but, you know, governments are better at funding public goods. But like, if you have an entrepreneur, a real public good, like a public good where people don't realize the value of it until after it

already exists. And sort of both markets and the governments kind of often end up passing it by, right? And so there's the question of like whether or not something pioneered by the crypto space can kind of help. And I mean, the thing that we've seen so far, right, is I think the biggest plugger of that gap has like basically been billionaires, right? So, you know, the, the Sergei Brins, the, you know, like sometimes Elon Musk's, if you throw in the space program, the Brian Johnson's of the world. And a lot of, like, a lot of that stuff ends up being quite valuable. But then, like, we also see that, like, even that ends up missing some things, right? Like, so the thing that Brian Johnson is famous for, for example, right, is he's got this, you know, like, blueprints program

where he basically spends literally millions of dollars a year and, like, literally his entire, life trying to keep himself healthy and optimizing his body as much as possible. And it's like great as a frontier science experiments, but then like it leaves this like a very obvious hole open of like, well, I'm, you know, like how do, what's the version of this that actually works for the little guy, right? Like, are we going to see, you know, like the rich guys will lift a 150, but then the little guys are still stuck at, you know, 77, right? And yeah, this is the place where probably D.Sai could really come in and help, right? Like, basically, you know, if you have a community of people who are, you know, not 100 millionaires, and so they actually see the need for,

you know, having something like blueprints, but that does not require sacrificing your entire livelihood and, you know, like insanely unrealistic amounts of money every month to actually to try to do. And then you try to like do community building work. to galvanize a community to try to actually, yeah, you know, like build that, I guess, you know, you can call it Blueprint for the Everyman, actually execute on it, do a whole bunch of experiments on it at mass scale, right? So your sample size is not n equals one anymore. It's like actually, you know, n equals 500.

Do everything in an open source way and, you know, like really push things forward together as a community. then like that's an approach that has a huge amount of value right and i think the crypto space has a lot of ethos alignment with that kind of approach right and i mean at zosolo for example we yeah saw a lot of excitement about that kind of thing uh but what we yeah the the other thing that i mean like i think crypto can provide is like actually trying to you know use the different tools that we have to like try to make them work at a technical level right so there's obviously just public goods funding and tools that get built for allocating capital. I mean, capital itself are just getting allocated in more decentralized ways, right?

So we have quadratic funding, we have retroact to public goods funding, and you know, we have dows of different kinds, we should probably have one of all three in each industry. Then, you know, all of these different tools for identifying whose contributions ended up being really valuable, trying to have like on chain, I mean, like contribution and citation graphs and all of those things. And the more of that stuff we can try to use, I mean, I think the crypto space itself is like the most natural guinea pig number one for a lot of that stuff. But like the D-Sy space feels like a really natural guinea pig number two, right? So, yeah, I think there's a lot of like spiritual alignment where there's an opportunity to turn it into

practical alignment. And I think in that case, yeah, I mean, part of it is basically, you know, like creating an alternate, creating this alternate system because the existing public goods funding infrastructure of society is not serving a lot of these, you know, like really interesting science projects. Well, but then I think, you know, the longer term goal also is setting an example, right? Like, you don't just want, you know, one billion dollars of the crypto space as native capital going to those places. We want like trillions of dollars of the world's. capital going to things that are truly important and really helping to scale that up. So, yeah, I mean, those are, you know, some of the things that I hope to see.

So inside of all of these different like tech landscapes out there, we focused on DCI a lot just now, but also like many of the other ones that were at Zuzalo, perhaps, like AI and synthetic biology, longevity, all super interesting. Say, for example, Vitalik, that there, you had a duplicate of yourself and this duplicate wanted to build a startup. Which inside of one of these spaces? Which one of these spaces captures your attention the most? And where would you build a startup in this landscape of crypto-adjacent platforms?

It's an interesting question. Hmm. Like, I wonder if I could split myself into two copies, like, what would the other copy be doing? I mean, one option would be, like, doing Zerzalo full-time. That would be, like, something one of the copies, would probably run off doing. And now there would be... And so just to say that that answer is like a network state.

Right. I'm working at the network state. Exactly. But I think... Well, what's the truth is... It's something that can be... It's something that can be kind of made it more... It's like a very broad concept, right?

And like, network state is, you know, like this very kind of, you know, like, specific meme for a specific set of ideas and they're kind of... They're adjacent, but it's possible to pull it in a lot of... A lot of different directions. And I think in a lot of... ways it actually is adjacent to some of this community-driven D-Sy stuff, right? Because a lot of what that's about is basically organizing a community to like explore frontier technology collectively, right? And I think that is part of what people want network states to do. And so, but at the same time,

you know, there is the argument that like, well, actually, you know, there's a lot of that that you can do without like literally creating a new country and like, you know, like going, you know, diving your feet all the way into the ocean and like playing full-scale geopolitics, right? So, you know, there's a lot of, there's like a big part of the spectrum that could be explored there. I could also see a copy of myself one or two years ago, like actually splitting off and trying to do the decentralized social thing. But, you know, I'm glad that like, you know, I'm glad that like,

you know, like, Farcaster and Lens and some of these others exist to try to try out different versions of that. And they, you know, seem to be going so far in a direction that's like pretty aligned to the values, I think, right? Like my, one of my biggest fears of, you know, like, especially things that are VC-backed is that they're going to, like, basically have, you know, the adults in the room come and sit down. and tell them that like, hey, actually the crypto stuff just has to be a window addressing. And like really, you know, you have to use email accounts to back everything up. And you have to like use phone number verification for everything. And you have to like, have a centralized system, server run things. And at some point, like, hey, you know, you can't actually let the internet see that I see everything because then the AIs will read it.

And then, you know, you go for more steps down galaxy brain logic. And you've basically, you know, like reentered the sort of existing web two, dystopia. So I'm actually, you know, I'm pleased by the extents to which Dan Romero and like for Richard of us and co have not become that, which I think is great. And, you know, and then, you know, like a lens itself has also been, you know, like very Ethereum accounts driven and had a pretty radical about this from day one, right? But, you know, there is definitely still a lot of ways to go. And actually, what's interesting is that I think it's very possible for someone new to just

come in and plop themselves into either of those ecosystems for missionously, right? Like the Farcaster team is focusing on Warpcast, but like you could totally go and start your own company that makes your own interface that follows totally different principles, right? So that's an opportunity that still exists for a lot of people. there's other like specific problems in the space that would be interesting to tackle like me i mean i still feel like the oracle problem sometimes doesn't get enough love right in the sense that like you know we have oracles but like you know really being rigorous about like finding

things that are not optimized for speed but optimized for security right like uh you know your job as a defy person is not to give people 5% returns instead of 3% returns. Your job as a defy person is to minimize the chance that your users are going to get negative 100% returns. And, you know, fortunately, that's a lesson that's somewhat clearer now than it was 12 months ago. But I think it's a lesson that could be made to be even clearer still. Yeah, also another one would be trying to really push the ZK side of the stack full-time. that's definitely another thing that I'd also totally love to get into in some way. On the bio side, I think, I mean, I'm actually doing this kind of blueprint for the Everyman thing.

I think that's something that someone should absolutely go and do. Yeah, yeah. So there's, I think, a lot of really fascinating things that you could totally get into and do at this point. What about just for the archetypal Web3 builder out there? Like, what would you say the current innovation sphere in Ethereum and broader crypto is under indexing that you'd like them to reorient their focus towards? That's a good question. Six months ago, the answer would have been account abstraction wallets, but now it's fascinating. Pretty much everyone's gone in account abstraction wallet now.

Like, I've been traveling through East Asia for the past month, and there's been at least like four groups that I've, talk to, like, I think maybe even five groups that are building some kind of account obstruction wallet. It's interesting in how, you know, like, basically these new tech spaces, they create this kind of reset, right, where if you come in as a new person, you're suddenly not, like, 10 years behind everyone else anymore, and so you actually have a chance. And, like, I feel like ZK EVMs and EOC-4337 have both done a good job of, like, actually enabling these totally new groups of people to participate, right?

Like, I remember five years ago, like it definitely felt like, you know, East Asia had great exchanges and great mining, but, you know, very little contribution to the Devon research side. And I feel like that has really massively flipped, which is interesting, right? Because, like, you know, when the average crypto, you know, like Twitter person says, like, quote Asia is back, they're really referring to like 100 millionaires, you know, like going and buying, you know, your favorite dog coins or whatever. But like, I feel like the in the year, it's like, you know, Asia is back, but there's like, you know, a degree of like even, you know, like a deep community and technical involvement that's, you know, like even greater than anything that I've seen. I mean, like before COVID or before any of the, any of the recent bubble. So there's like, I guess what I'm saying from there is like there's a lot of opportunities to kind of come in and to join. pretty much always. And so the question is like, what of those really is the thing that you want to do now? And there, I feel like wallets are already, yeah, starting to get saturated. The thing that's a little bit less saturated is like security software, right? Basically, I've been starting to see actually that some of these exist.

There's this thing that I only just learned about yesterday. It's called, I think it's joinfire.xyz. It's like this extra extension that you add. And like it basically tells you, you know, like, what are the things that you're assigning on MetaMask doing? And like that particular one I only just like saw yesterday and I saw a few people, you know, like endorsing. So like, don't, you know, like, I'm not claiming to understand that particular one or like how, you know, like good or actually useful it is deeply at all.

Right. But like, and I've been told there's like other things in the similar category. But I think like really going deeper into that space and building things that help users understand what the heck it is that they're doing when they're interacting with Defi is probably one. Another thing is infrastructure for helping to push the Ethereum layer one ecosystem onto layer two. So one example of this is a Merkel proof verifier that basically lets you do full decentralized verification of ENS names on top of on layer two, right? Like there are things like opta names. xyz and there's some other ones, but like so far, my understanding is that they're still basically just verifying signatures from a centralized provider, right? But if you do Merkel proof

verification, then you can get rid of a centralized provider. And like, this is all off-chain calling, right? So it doesn't actually cost any guess. So that's like, and then that's one example, but I feel like there's a whole bunch of other examples of infrastructure that makes sense to build. If you're, if we're trying to like really, yeah, push the SQL system up from being. completely in a nuclear one dependence so like

really participating on layer two's. A third one would be an enterprise focused stack that encourages existing enterprises

that do centralized things to instead build voladiums, right? So expanding out on this one a bit. You know,

you remember the 2014 until like 2019 era where everyone was excited about permission consortium chains? Right?

Like you remember this? That was a little but before my time. But yeah, I remember the hyper ledger, the IBM hyperleds. Right, right. Exactly. Right. And there are like a lot of these and I think these have mostly failed. And my own view of like why there was interest and then why there was failure is that people kind of intuitively felt that there was a bunch of applications where you want some kind of compromise between the centralized approach and the decentralized approach. And, you know, it's like you want the decentralized approach because that enables trustworthy,

between a whole bunch of different market participants. And like the ideal of, instead of every company having its own spreadsheet, you have one spreadsheet that everyone can edit, but where everyone has to follow rules. And the other side of the compromise, which is like doing everything on chain, actually like totally breaks privacy and it totally is unscalable and it requires people to completely rewrite their software. But then I think what people want it out of consortium chains is like the 50-50 compromise. against the best of both worlds. But I think what we ended up getting is the 50-50 compromise

against the worst of both worlds, right? And the reason why is basically that, like, first, you know, you're still building a blockchain. And so you still have most of the IT overhead of building a blockchain. Then you have a lot of community building overhead. But then because of the centralization, that actually becomes harder again, right? Like one pattern that I saw happen over and over again is someone creates a consortium and the first five members happily join the consortium and start working together. But then members number six to 20 just never end up getting interested because they don't want to join an ecosystem that feels like it's already dominated by the first five members.

So there's just a lot of structural reasons why that approach should not work. But the approach that I think can work is validiums, right? Validiums are basically, they're like roll-ups without the data on chain, or another way of putting it is there are centralized systems, but where the hash of the database gets put on chain, and every time the database gets updated, a new hash gets put on chain with a SNARC proving that the update was valid, right? And so what you can do is you can take an existing centralized system, and then you can just, like, add an extra damon that reads the database, that hashes it, and that a

understands the execution logic that makes an arcs and they just upload those strokes on chain, right? And so he can prove that the database was only ever updated in valid ways. And this is just a thing that can keep on running on, you know, like running. And then once those hashes and the proofs are on chain, individual users can like talk to the game and they can get Merkel proofs of what their current balance is. And so, you know, you can do all of those things. And, you know, you can get basically, yeah, this is. again a compromise between centralization and decentralization, right? Where you're gaining the decentralization benefits because you have proofs and the hashes are being put on chain.

And so you're really sure that you're not passing two different sets of proofs to different people. But at the same time, you know, you are still gaining the efficiencies of keeping decentralized because you don't have to like pay any gas per transaction. and you don't have to tell your IT people to completely rebuild the system because it's like, well, you can keep your software. You just run an extra game beside it, right? And so this, I think, actually is the 50-50 compromise that actually gives you the benefits of both instead of giving you the disadvantages of both.

And it's actually, yeah, there is a weak version of this that people are starting to already use, which is proof of solvency, right? Like, proof of solvency is the first, I think. semi-success business- because that's what it literally is. In exchange is an enterprise and with proof of solvency,

you're basically actually publishing data and you get published that data on chain in order to prove certain things about your database, which is basically that you know, the amount of user balances that you have actually doesn't exceed the

amount of money in your wallet. Right? So that I think is a place to start, but like this is something that can apply in gaming. It can apply for potentially even, you know, like social media algorithmic type of use cases. It can apply for supply chain management. It can apply in a lot of different areas. I mean, supply chain management is interesting because if you have those records, then there's like financial stuff, like things like short-term loans that can directly piggyback into those records. And so there's a lot of

interesting stuff that you can do, right? But like, actually building the software stack that makes it possible to do that is something that's only possible now because this all completely depends on zero knowledge proofs, right? And zero knowledge proofs are like finally at the level now where regular developers can go and build things on top of them without having to like deeply understand what a zika's, you know, what a polynomial is, right? So I think that's something that would be really valuable to start building now as well. So yeah, yeah, I think in general, there's just like a lot of these, you know, like little areas that keep popping up. And I think literal areas are going to just keep popping up every six months. So there's a lot of places to participate. Well, I don't think anyone listening to this has any doubt that there's plenty of left to build and do in this crypto world.

And that was just a fantastic splattering of many different possibilities from many different industries. And Vitalik, as we come to a close on this conversation, I want to just turn ourselves to the here and now. I think in the last maybe few months or so, people in the crypto world have reoriented their perspective from cleaning up the mess that was 2022 because I think that is decently done, at least in process. We can trust that the good things are going to happen in that way. And now we are focused towards what happens next.

And I mean, everyone is cautiously crossing their fingers like bull market, bull market, bowl market. But what do we have, what do you have in as things that you want the crypto world to not do or maybe to focus on so we can successfully navigate the next bull market that if, you know, all these cycles do play out. If we get another one, then here we go. What, what should we try and get done as a community, as a culture, to make sure that we don't mess it up again? Yeah. I mean, I think to me the big thing is like navigating this type of, tightrope of like actually increasing security and actually increasing decentralization at the same time, right? Like basically, yeah, building an ecosystem where it actually is possible for people to like put in their money and collect, you know, even 2% a year APRs, but still feel comfortable that they're not like risking and even one over 50 chance of losing all of their money during that year.

And that's, I think, possible to get to, but it requires a very different mindset from the mindset that's, like, you know, going all out and crazy and trying to, like, maximize returns for people at all costs. So increasing security of defy protocols and of wallets and of chains and of ecosystems and all of that is one side of it. And then the other side of it is, like, doing that in ways that don't basically surrender to. like, oh, you know, if you actually want to be secure, you pretty much have to put your funds in Coinbase or like make them or make all of your activity, yeah, or your anti-simile be backed by a Google account, right? So, yeah, I think it's finding the, a good path that achieves both of those objectives, I think is really the challenging goal here. And I think if we can achieve that, then we'll be in a really good place.

Well, Vitalik, thank you for sparking my and hopefully everyone else's imaginations about what's left to do in this world, because it's quite a lot, which means that we're going to have a ton of fun doing it along the way. So appreciate you coming in to all the way from Asia to beam into permissionless. Yeah, thank you so much, David. It was fun.