Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Lido V3: Ushering in Institutional Staking Through stVaults - Hasu

Episode Date: April 1, 2025

Ethereum’s transition from proof-of-work to proof-of-stake created a unique set of conditions (i.e. lack of protocol-level delegation, 32 ETH requirement, long exit queues, etc.) that led to Lido’s liquid staking model to gain huge traction, significantly eclipsing other LSD providers on native PoS chains. stETH added on-demand liquidity, bypassing withdrawal windows, while also increasing DeFi utilization and increasing yields. Moreover, by allowing users to stake any amount of ETH in pools, it removed the requirement for 32 ETH increments, ultimately improving decentralisation through long tail distribution of individual stakers. Lido V3 introduces modular stVaults which enable staking customization. This allows professional actors, such as institutional stakers, to have granular control over validators, MEV and other parameters, diversifying their investment strategies.Topics covered in this episode:Hasu’s backgroundDiscovering LidoLiquid staking and the early days of LidoWhy liquid staking gained traction on EthereumThe evolution of LidoInitial decentralisation concerns and the importance of dual governanceRestakingLido V3 and vaultsInstitutional staking & ETFsEthereum’s ‘crisis’ and its valuesEpisode links:Hasu on XLido on XSponsors:Gnosis: Gnosis builds decentralized infrastructure for the Ethereum ecosystem, since 2015. This year marks the launch of Gnosis Pay— the world's first Decentralized Payment Network. Get started today at - gnosis.ioChorus One: one of the largest node operators worldwide, trusted by 175,000+ accounts across more than 60 networks, Chorus One combines institutional-grade security with the highest yields at - chorus.oneThis episode is hosted by Brian Fabian Crain.

I'm not bullish on any of them because you need like a very specific set of circumstances to be true for liquid staking to repeat the kind of success story that it has on Ethereum. The first thing to understand about ETFs in general is like they will basically all compete on price. That's why staking ETFs are going to have a big advantage over non-staking ETS just because they can pay you right from the rewards. Like your balance is still going to grow. It is actually a very good and like attractive product. I'm talking about restaking and talking about institutional demand. The problem here was like in both cases that the staking setup that Lido gave you was not flexible enough, right? It was opinionated.

It was not putting your money in restaking. You were getting the same returns as everybody else. We're not able to choose who your note or rather is and like what maybe V relays they use and if they use DVT or not. And so I think the idea of Waltz is a very kind of organic one. Create your own staking setup with your own node upredders and then have the ability to mint the liquid staking token. like an our case take if against that with a collateral ratio that that is based on that vaults risk profile. Hello and welcome to Epicenter, the show which talks about technologies, projects and people

driving decentralization and development revolution. I'm Brian Crane. And today I'm speaking with Hasu, who is a crypto researcher and writer and strategic advisor to Lido. Of course, Lido does need much of an introduction, although we will introduce it. but Lido is the leading liquid staking protocol, one of the leading staking projects. So really exciting to talk about Lido

and some of the evolutions that Lido's gone through and that are upcoming for Lido. So really excited for that. Now, just before we go and talk with Hazu, we'd like to share a few words from our sponsors this week. If you're looking to stake your crypto with confidence, look no further than course one. More than 150,000 delegators, including institutions like BitGo, Pintera Capital and Ledger, TrustCore as one with their assets.

They support over 50 blockchains and are leaders in governance or networks like Cosmos, ensuring your stake, is responsibly managed. Thanks to their advanced MEV research, you can also enjoy the highest staking rewards. You can stake directly from your preferred wallet, set up a white label note, restake your assets on eigenayer or symbiotic or use their SDK for multi-chain staking in your app. Learn more at chorus.1 and start stacking today. This episode is proudly brought to by NOSIS, a collective dedicated to advancing a decentralized future. NOSIS leads innovation with circles, NOSIS pay and Metri, reshaping, open banking and money. With Hashi and NOSIS VPN, they're building a more resilient privacy-focused internet.

If you're looking for an L1 to launch your project, NOSIS chain offers the same development of as Ethereum with lower transaction fees. It's supported by over 200,000 validators, making NOSIS chain a reliable and credibly neutral foundation for your applications. NOSIS DAO drives NOSIS governance where every voice matters. Join the NOSIS community in the NOSISDAO forum today. Deploy on the EVM-compatible NOSIS chain or secure the network with just one GNO and affordable hardware. Start your decentralization journey today at nosus.io. Cool. How's you? Actually, you've been on before. It's been four years, almost four and a half years. So a long time ago, it's good to have you back on. Yeah, the episode was a long time ago.

I think with Kane from Synthetics or something like that, if I remember correctly. That's right. Yeah, it's good to be back. Thanks, fine. Yeah, what liquidity mining. Yeah, when like all of that started, right? It's crazy that like liquidity mining was this topic that, like, there was a time when liquidity mining was like so new that we had to discuss it on a podcast, right? That's what it meant.

Yeah, it was the Stone Ages of Defy back then when you were still using a manual, I don't know, living in a cave, but starting to defy. Right. So how did you first get involved in crypto? What's your crypto journey? Yeah, I think the kind of short version is I was a professional poker player for 10 years. During that time, you know, what started as a hobby and like, you know, an activity where you, if you, you know, you were motivated and you were somewhat intelligent, you could make a decent living. like it became much more, you know, a sport over time, or I would say, like,

kind of became professionalized in many ways. And if you wanted to be a top player, you had to work with, you know, what's now known as solvers, like kind of type of like chess computers, but for poker. You had to, you know, build software. You had to study a lot using the software, try to improve your game. and over time I became more and more. You play poker, but then you'd have software to help you decide what hands to play. So no, so you weren't allowed to use any of the software in, you know, in real time.

The same way, if you go to like chess.com, you're not allowed to use a chess computer on the site. That would be considered cheating, right? But with poker, how do you check that? Is it sort of an honors based? So at the time, basically, you know, the kind of poker solvers weren't really commonplace yet. I would say. And the ones that were out there were like pretty crude. So it was actually not easy technically, I think, to even try to get that to work, to use it in real time. Today it's a different story.

Like today you can get those things for like very cheap. They're very fast. And so yeah, like today actually, you know, pretty much anybody could cheat probably in online poker if they want it. And that's why it is a big reason why the game is kind of dying. And the main games or like the biggest games now are played exclusively between people who know each other. And it's like reputation-based. And, you know, a lot of cases also people just play offline. Maybe you don't have the same challenges, right?

That's interesting, right? That's kind of like maybe general, you know, it's interesting to think about that. Because with AI, I guess that's going to happen for like all kinds of stuff, right? they so far had like humans compete and then you're like, this is not really working anymore. Yeah. I mean, did you see this,

I know, the other month there was a scandal about somebody had like invented a systematic way to basically cheat in job interviews online using AI. So of course one, we have this issue like all the time, right? So we have it all. First of all,

you know, we ask like questions when people apply, sort of like essay, written questions. and then I think, you know, I mean, our team is like, ah, this is an AI generated answer, but, you know, of course, I don't know how, what's the detection rate is here.

And, but then I think we've also had various cases where, you know, our team, like, suspected or where clearly people, either clearly people are using, you know, live in real time as they're getting asked questions using, like, chat GPT to get answers. But then I think in some cases they're like, that's definitely happening, but then in other cases, they're like not sure and it's very tricky. Yeah, so, I mean, chess had this problem before poker, because chess computers existed, you know, probably a decade or two before poker, like poker servers did.

And they have, I mean, they have killed, like, poker, like chess that's played for money, like to a big degree. Like, that used to be played for money. Same as Beck, Gammond, and those games got basically solved. cheating became too easy. And so, you know, the trust problem was basically insurmountable. But there are also forms of chess. It's called centaur chess.

Centaur because, you know, it's like, you know, the centaur is like half horse, half human, right? And like a centaur chess is basically like half human, half AI. And so it's the idea that, you know, you can have AI's competed with each other. You can have humans compete with each other. But if you throw like a human and an AI together, it's still a challenge. right, like, you know, to beat another human and another AI in combination. And so it's the idea in a lot of ways that, you know, yes, like, AIs will play a much bigger

role, but like an AI that's somehow bundled with a human or controlled by a human will always be more effective than just a human or just an AI. And so that's the case for chess that like human plus AI beats AI? Yes, it actually did, yeah, like, because I mean, there are many cases where I don't know how it works now, right? But in poker, there were many situations where the AI was actually completely indifferent between choosing like one of two or one of three options in a given situation. And whenever something is close, I think human intuition can play a pretty big role.

Also, AI, like, depending on how good the abstraction was, that basically the game was solved on. because you know poker is too big to solve like the full game quote unquote like you have to make a simpler game that is kind of an abstraction of the bigger game then you can solve that but then you have this abstraction step also back right so because they you may in the solution you see like oh i'm supposed to play this situation in this way uh but like if you're an expert in in solvers then you know that the i probably never got to look at this exact situation this is only part of like a bucket of like one million similar situations that it's all grouping together. And so, you know, if you know these things, then you can add a lot of kind of intuition and like nuance on top of maybe what the AI is already suggesting. I mean, that is, I guess, the great hope we all have, is that like somehow, you know, we'll be able to like leverage or merge and cooperate with AI in ways that we can amplify what humans can do and you're not just become made redundant by the computers. Yeah, I think so, right? And this goes back to what we were talking about in job interviews and so on.

I like to the degree that we're still trying to test human capability. I mean, we now need to test like human plus AI capability, right? How good are you in working with AI? And I mean, the most obvious thing is like the thing, the things, we test for can become much more complex, right? Like much bigger in scope, right? Where previously you would send someone like five questions to answer, maybe you now give them a much more expansive work test that fully acknowledges that. That is a great point, right? Maybe one way to go would be,

or maybe that is the inevitable thing to go is that you say like, hey, we're going to do this interview and you explicitly are allowed to use AI. And then we're going to see. but I don't know, it's tricky one too. I guess you'll have to totally redefine how the interviews work. Yeah, yeah. And I mean, you can even include, you know, let me watch you use AI or like document, you know, give me your prompt history, right?

Because even the way that like somebody talks, I'm like, okay, so I like a lot of people I know are saying, I mean, I'm not a manager. I'm more of an IC, but I used to be a manager in the past. And I think the way that you manage people, especially more junior people, is very similar to basically how you would prompt an AI. Like, I see a lot of parallels. And I think a lot of my friends who are managers saying the exact same thing. They really see very little difference between like how you correctly prompt an AI and how you, you know, you delegate a task, for example, right? And, you know, that is a thing that you, you know, first of all, like, humans are going to get much better at delegation, I think, and management as a result of having an eye, because all of us have, like, you know, a thousand junior employees if we want, like from now on.

And, you know, you, you can test those things, right? Like, in the past, it used to be actually pretty hard to test someone's management skills in an interview setting. But now you can, you know, you can have a real kind of simulated management. relationship, even just by looking at someone's prompt history, which is very interesting. Yeah. Okay. Okay. Very interesting. But let's come back to the top. So the crypto question. So you're playing poker and then? Yeah. So I was playing poker. But I realized over time I became, you know, fell more in love with the studying aspect of the game, this way of like working with solvers. But like, mostly like thinking about the game and talking.

about the game with other people and kind of like unraveling, you know, its mysteries and, you know, finding new ways to think about it. And, you know, I was always part of a group with other people and we were kind of coaching each other and I was coaching some people. You know, I realized that this coaching, this like studying and coaching aspect, like I was much more motivated by learning and teaching other people than I was at some point by competing. and I knew that, you know, when I am done with poker, I want to do that full time. I didn't know what topic, but I knew basically the form factor that that activity would have to

take. And when I, you know, later found crypto, I like, crypto was always kind of maybe a little just like rights outside my, you know, my orbit, basically. So that I knew a bunch of my friends were already like. buying crypto since 2013, 2014, you know, making money and dabbling with like trading. And also we were using it to send funds back and forth occasionally. When I then started to actually look into it, I very quickly fell down the rabbit hole and that decided that, you know, this would be the thing that I want to spend probably the next,

at least decade of my life on. And, you know, I already knew what form factor I wanted that activity to have. And so I, for the first couple of years, I only basically focused on studying crypto from many different angles and write about it, tweet about it, make a podcast about it. And luckily, it turned out that crypto, I would say, sorry, crypto is actually uniquely well suited to such an approach just because it's so complex and so interdisciplinary. you know, you really need to kind of understand a lot of different aspects ranging from economics, politics, law, computer science, game theory. You can look at this from so many different angles and always find like new interesting ways. And a lot of good insights come from putting those different perspectives together.

Yet crypto was so new as an industry that somebody could come in from like totally kind of the outside and, you know, just by being a generalist, you know, catch up to whatever is the frontier of that industry within maybe two years and then start making net new contributions to the industry, right? And I think when you come into, I don't know, like math or physics or really, like really many, even AI probably, like come into many other industries, you won't be able to do that. What were the things maybe before Lido that, you know, the rabbit holes you've been down on that really, I don't know, like got you most excited or obsessed?

Yeah, in the beginning, I was very focused on Bitcoin. I thought this was the, you know, the main thing to understand first, which sent me down, you know, the rabbit hole of, well, what is money, you know, what is, how does it work? What is banking? I could tell that there was some truth to, I think what Bitcoiners were saying about maybe money in the banking system, but also there was so much stuff that they were saying. It was like simply wrong, right?

Like I think all of the ideas that Bitcoin people have about fractional reserve banking and all of that stuff and fiat money in a lot of ways is just like completely not true. But there were the kind of interesting, like they were right about some parts. I mean, the relationship between, like, government and money, I think is like one good example or the way that money can be weaponized and, you know, or like used to control people and societies. And so I thought there is, you know, an interesting connection here, but I think I, I mean, I quickly ended up thinking that Bitcoin competes much more with gold than with the dollar. yet at the same time

there's like a hierarchy of money on which both gold and the dollar also exists right and so it was kind of for me that was a very like formative I think couple years like just like getting building up all of these mental models to make sense

and you know Bitcoin for me was very interesting like I could see the value for sure and once I did once I had that part kind of locked down it was more about like, okay, how does it actually work? How is it, how does it evolve? How is it governed? What are like the social systems kind of on top of maybe the technical system that is Bitcoin.

What if we have, you know, we have this model of like how Bitcoin works, but what if we play it out 10 years into the future, 20 years into the future? How does it change? And like for me, for example, the idea of Bitcoin security model and the block sub city that that is going to run out. That was like a very clear. Like that wasn't even a long tail risk. There was just a fat tail risk, right?

That for some reason was like illegal to talk about. Yeah. That's still something that worries you a lot when it comes to Bitcoin. I think it does. I mean, it now worries me a bit less than it has. Not big, I mean, fees are still very low on Bitcoin. but I think now that Bitcoin is starting to have a bit of a layer two roadmap. And, you know, we are actually, we are starting to see some reasons why people need to use

the layer one, you know, maybe for DA, maybe for settlement between different layer two. So I think it is at least easier to envision that transaction fees at some point. Like there is enough kind of an economy on top of Bitcoin that, you know, you don't have to worry, maybe so much about that. Yeah, yeah. It still worries me as well. I do think it's a big kind of

thing that people in Bitcoin just... I think it's also the sort of stuff where people talk about the risk for a while, worry about it, but then they're like, is there anything actionable you can do? I'm like, really hard, right,

to do anything? And then you just sort of forget about it. and then you ignore, right? Because it's like, well, the risk was discussed, you know, it didn't go anywhere. So then like no point to sort of, like people are interested in revisiting that discussion. So I feel like now it's really,

I feel the only time when this would become a big topic is when it's actually, when there's actually real security issues. Yeah. I actually thought the other day, I was asking myself if I had, become like more jaded and like more, I don't know, less, uh, kind of willing to like push for big things in crypto because when I, you know, when I was new to crypto is very much like,

oh yeah, the security budget in Bitcoin, that's clearly a problem. Let me write, you know, like let me tweet about that, uh, like and write articles about it and go on podcasts and discuss it with everybody, like seek out people to discuss it with, try to lobby for, not even for changing something. in the beginning, but like for getting people to agree that it's a problem, so we can have a discussion about how to, how to address that. And I was, you know, that was like an uncomfortable time, right?

But also like in time of basically like extreme growth. And now I mean, I, there are still, of course, like things that I would change in crypto, but I was wondering if I kind of still have that, you know, same maybe energy. and this confrontational energy as well, right? To kind of go out and like just single-handedly push for like something to change. And yeah, it was a kind of interesting maybe look in the mirror. So, you know, maybe it's time to maybe go back more towards that. Yeah, of course, it's so hard to make changes right when it comes to some of these things.

How did you get involved in Lydol? Yeah, I mean, from Bitcoin. Bitcoin is very simple. scripting language. You couldn't, I mean, I'm not very technical, but it was clear to see that you can't do very much with it, right? Like, when you were in Bitcoin, you don't have much, maybe of an appreciation for what Ethereum is trying to do

in the beginning. But for me, the time when I started to really pay attention was maybe about like 2019, when some of the first defy apps started to launch. And for me, that was a sign that, wow, this is really interesting because this isn't just the kind of fork of

Bitcoin that's maybe doing like some things differently. This is really adding a new dimension to what crypto can do, right? The idea that you can build smart contract platforms, you can have these decentralized smart contracts and this is in some ways it's like

a super set of Bitcoin, right? Because like you can, like any token can exist. Like a token is just a smart contract, right? It's just like a smart contract account where people have like, you know, balances, like, you know, signatures and balances, right? And so, yeah, for me, that was really eye-opening

kind of to see those defy apps. And at this point, I think I gradually started to spend like more and more of my time looking at Ethereum and looking at defy in particular because of all that prior research and like education that I'd already done on, on like how financial, works and money and those things.

For me, I think for me, D-Fi clicked much earlier than for other people because of that then, because I had done that education in Bitcoin. And I mean, you still have, like, just I locked on Twitter yesterday and, you know, there was like a threat from like a top tier VC who was like talking about how we can bring like Elgo Stables back. And like whether this or that hasn't been tried.

And it's like this just like extreme misunderstanding of like how banking works and like how money works. and I'm like, yeah, like, you know, sometimes you don't, it's hard to appreciate, like, you know, what do you know, what do you know, or like how, how that's not, you know, you shouldn't take that for granted in that sense. And so, and so there's like a lot of people even in like Ethereum who don't know even like the first thing about finance and, and so on. And like we asked, I think we are still like early in kind of understanding Defi and appreciating that. And yeah, so like more and more DeFi happened on Ethereum. And then I think at this time I was, you know, you had Georgos on the show probably a couple times. We were very close back then. He was still, Georgia was still living in Europe at the time. And we were working very closely together, writing like a lot of research articles and doing kind of just like explorative stuff in the Ethereum ecosystem. we were very, you know, when this was before EIP-1559 happened and we were very focused on topics around M.EV and, you know,

transaction fee mechanisms, which also like grew out of my interest for what transaction fee mechanisms in Bitcoin and how if we maybe change that, we can change the way that like, like how much fee revenue can be raised from people transacting, right? And so it was very natural for me then to ask those questions in Ethereum. and I gravitated a lot towards this EIP-1-559 proposal, which Vitalik had made, I think, already like two years before. And it got, but it didn't, you know, he never really pushed for it. It didn't really catch on. And so it kind of lay dormant.

And then there was a kind of push to revive it and bring it back. And we were like, we were doing, I think, some data, like simulation-based analysis about that and writing articles about it. And, you know, one of the topics that we were interested in was basically staking pools. Because Ethereum at the time was about to switch to proof of stake or like proof of stake had been in the works for many years. But that was one of the things we wrote about. We wrote an article about kind of staking pools and like the difference between centralized

and decentralized staking pools and staking derivatives. And we basically concluded that in Ethereum, there was like a really good setup to create a decentralized staking pool in between. And like for this staking pool also to have advantages over over centralized staking that would kind of give them a lack of an adoption. And between those staking pools, you had a real, or at least we thought you had a real kind of winner-take most dynamic because you could introduce a staking derivative

that could itself become a building block for like other things and like be used in other app in other defy apps and so on. because, you know, like even like tokens themselves are just like, you know, have liquidity effects and network effects and like and so on. We thought that basically because staking derivatives are going to be when I take most. That means that staking pools would also be when I take most. And yeah, that article was very influential at the time and we, I mean, Paradigm was already an investor in Lido and I connected with the Lido team over that article. and we got to talking for a couple months and maybe like half a year later

I became an official advisor to the team. Yeah, I mean, we were also at course, one, I think we started talking about, you know, like liquid staking idea in 2018, right? Like right when we started it, I mean, it's such an obvious idea, right? And then we were, I think we did, built the first, like, liquid staking thing for Cosmos

in like a hackathon. in 2019, I guess. Yeah. Also a long time ago now. Then we wrote this big kind of paper on, you know, the risks and how to do it. And although it was a little bit focused on cosmos. Actually, I remember we were also thinking about Ethereum a bit at the time. But we were like, ah, withdrawal thing.

Like, how can you do it? Like, you know, that was one thing. Of course, then having the kind of multi-sig initially, or, you know, if the threshold signature was like, and then the other thing was like, oh, but the LDO, it's just like, looks a lot like a security in some ways. But I think in the end, in the end, I think the choices, right? But then, of course, we were very involved in Lido as well, right,

in like launching it from the very beginning. But I think in the end it's also something. where we kind of saw a lot of people were much more conservative back then in terms of regulatory risks right and i think we've kind of seen that yeah just the winning path is off i think it's been just to you know go ahead and do it right and you do it in an ethical way and try to have decentralization and be honest and stuff like that the the right level of risk in business is almost never no risk right you know there's almost like a form of control risk that you want to take.

And I think what, but I mean, what matters at the end of the day is that, you know, you do stuff that like, let's just look in the mirror at the end of the day. Yeah. There's like so many things you can do that are risky,

but that are also unethical and there's like things you can do that, you know, maybe are risky, but not, you know, in a way that you hope is going to become less risky over time and also that, you know, you have no problem justifying to yourself.

Because there's no other people getting hurt from that, right? Like, it's like net good for the word, I think. So yeah, I think that's definitely one of those examples. Yeah. So of course in the beginning, right, Lido, yeah. So there was basically kind of like a multi-sig in a way that was later removed, right? When they started having withdrawals, you know, smart contract controlled.

Yeah. The problem was that like, you know, you had the separation between the, you know, the beacon chain and the kind of the regular issue. chain, right? And so the beacon chain, you were not able to own a beacon chain validator with a smart contract yet because the beacon chain did not,

I think, like support smart contracts, like the technology didn't exist. Only EOAs could own, could control these like beacon chain validators. And so the best you could actually do here was a kind of like MPC is secured like multisage.

right? You couldn't do a smart contract. Like that was added only later. Yeah. And then so in the beginning, right? So it was basically that. And then you had five validators. It was the initial set. And, you know, people could just deposit the Eiff, get staked EF. And, you know, it had a huge amount of traction. I think probably the, I mean, my views, there was like two big reasons for it. maybe it was a third little bit of a reason, but I think the biggest reason was the withdrawals, right? So where you basically had to stake your Eiff and then you wouldn't be able to unstake it

until actual the merge happened, which you know, you didn't know how long was going to take. It could be three months, six months a year, who knows, right? So of course, huge amount of uncertainty. And then no native delegation, right? So Ethereum, I think, I mean, my view, Ethereum is a kind of an example where the staking design, the system staking design was a bit of a failure in some way from the perspective that it was designed around the idea that people will run their own validators at home and no in-protocol delegation.

And I was just completely ignoring what people actually want. and then Lido kind of built the thing that people actually want, which is just a simple thing where you can just stake any amount. So then I think Lido really, right, we saw also even today, right, liquid staking on Ethereum, there's like way, way, way more adoption than on any other chain. I think for these reasons. Like, I mean, I've seen so many different. liquid staking protocols launched.

I mean, every chain has like three to five different liquid staking protocols. Like even chains that have yet to launch, right? Like there's like three different liquid staking protocols on Monad and there's like two on mega-eaf and whatever, right? Like every chain has them. And I'm not bullish on any of them because you need like a very specific set of circumstances to be true for liquid staking to repeat the kind of success story that it has on Ethereum. And, you know, one big one was basically the fact that, like, if you staked, it was taking was like a one-way door, right?

Like, the merge ended up taking, you know, how long did they end up taking two years, right? Like, I think it was, like, locked up for two years. Yeah. Yeah, I think so. But maybe, like, maybe it was 18 months, right? But, like, I think the, like, most optimistic estimates for, like, around 12 to 15 months, right? So, you know, and, like, the conservative ones was, okay. maybe it's like two or three years or even never, right?

You say like you were taking, you were taking a risk. And I mean, the risk was less of the problem, which is like the discomfort from basically locking up your money for a long time. And so the two solutions to that were exchange staking. If they offered you a derivative, then at least you could sell the staked position inside the exchange, right? So maybe they could also issue like the derivative on chain and you can also trade it, etc but like exchange staking like we were very anti that because we didn't want like exchanges to

play like exchange is already the most valuable players in the crypto ecosystem at the time and we thought if they also control you know the chain itself like wow that's really bad right and so and the other was staking in multiples of 32 eve by like you know maybe eve was like one or two k or whatever at the time maybe it was even higher but like it was like 50k plus to stake and you couldn't stake in like lower increments there was very bad also right and so i mean those two things were basically those were like the golden ticket right in the sense like why a liquid sticking pool would do so well on ethium but like like all liquid staking ratios are super low like virtually every other chain other than if like even solana it has like one percent or two

percent like liquid staking penetration. I think it's a bit higher now. Yeah, it might have increased like since I last checked, yeah. But it's very small. Like it's not really comparable. I think that was like a good, I mean, both are necessary because like otherwise everything would be captured by exchanges and like in like a good environment for Lido to launch into, I would say.

Yeah, absolutely. So when you think of Lido and the history of Lido, what are the main. the main evolutions in the protocol and the main changes that have been enacted since the launch. Yeah, I mean, I think I mean, the launch itself is interesting. I would, in some sense,

I would call it like the pragmatic age, right? Like the V1 is like all about pragmatism. Because as you were saying, like, yes, like there was a small number of notobratus and the tokens were controlled by a multisic. And like it was all basically for technical reasons, right? Like you couldn't do,

you couldn't actually control like big and chain validators with a smart contract yet and like the baseline also at the time it was people staking on exchanges like because people didn't want to lock up their funds for two plus years right they you know they wanted some liquidity at least like all of the big capital did right and so it was like is this better is this better a is this better than like staking on an exchange and b does it have a path to decentralization right like those were the that Lido was asking itself. And like, it made all of the, the right choices.

That were like very pragmatic choices as well that kind of you needed to balance, you know, growth and like help for Ethereum because you don't, you didn't want the funds to end up on an exchange. And, and like path to decentralization, I would say. So then when I think two years later, like the merge happened and this allowed, you know, Lido then also to add withdrawals to the protocol. I think it took maybe like a couple more months for that than to happen. And I would say Lido has always been on kind of two tracks.

You know, one is basically, you know, serving users and like making the best possible product. And the other is about decentralization. And it was always about balancing these two things. And so the first track, I think in a lot of ways is about simplicity, you know, like, just like click one button and like have me, you know, stake my Eve for you and like give you the most rewards, right? The other is, I think, you know, also like integrations, liquidity. So you can actually, with a token that you get in return, you can actually go and use it,

right? Like you can borrow against it in lending markets. I think that really was the biggest thing, like unlocking, making, making like stake staked E on the beacon chain, turning that into like a collateral asset, like unlocking the collateral value of that. It just made, made it so much more valuable. And this would later,

I think this, this like track, like of just like making the best possible product for as many users as possible, that will then, I think, motivate like V3 as well as we're going to talk about in a minute. The other track was always about decentralization. So having like a really good node operator set, having like,

like we always like growing the number of node operators that stake is distributed across making sure it's geo distributed its client distributed all of the node operators are following following like best practices around how to run their staking setups and like you know make sure that nobody's ever getting slashed so it was a big deal and then the other two are kind of making withdraw its permissioners so the idea that if you actually hold any stake eve you can always go to the protocol and you can redeem it for eve and nobody can stop you right that is that is a that is a big kind of north star goal and one step towards that is like going to be triggerable withdrawed so that's you know i think uh it was added in the last hard fog i think uh in ethium um and the other one is dual governance right so the idea i mean so first of all you need to you need a way for someone to programmatically trigger withdrawals from the beacon chain in the sense that like the notarbreda with the funds are delegated to you know it's just

getting ejected so they have no way to like stall it out or something so that was important and the other was for people to be able to withdraw without governance having any way to stop that and so that is the idea of dual governance and the dual governance is an upcoming upgrade to title where you know, any where basically staked E4 does have a way to escalate and like freeze the governance system

when they think like a contentious proposal is happening. And that gives enough time for everybody to withdraw. And so, you know, it's the I, you know, it's what this really gives you as a staker is you can always withdraw. Like that nothing can happen in governance, really. Like as long as you assume that like a small

a number of parties is paying attention to act on time and then the protocol can be frozen and like everybody can withdraw their money and so that would then basically make withdraw as entirely permissionless which is a huge deal. Yeah, because there probably not all listeners remember this or followed this back then

but for a while Lido was very controversial so I think there was different reasons for it right, one was that LIDA ended up getting very big, getting up to about the third of all the eif stake was in LIDO. And so, of course, people are like, oh, if there's more than one third, then, and then I think the other big concern right here was that you had the LDO token, which is the governance token of the LIDO protocol. And so you, of course, had like, well, if now you have all this EF that's kind of, you know,

controlled by the LDO token, and then, you know, maybe the LDO token or they could, like, do something to, I don't know. control the protocol, extract value. Of course, that was never really, it was never a risk, I would say, in the sense that it wasn't the Lido philosophy or values or goals. And I think Lido's very conscious, right, of these concerns, right? So I think then the dual governance kind of addressed as that.

I wouldn't say that it wasn't a risk. I think the risk never materialized. Like, it's not, it's not, so I mean, these two things are related, right? Like, I mean, like, the fact that Lido controlled one third of ETH, I mean, what does control mean, right? That's the big question. And so the reality was that LDO could really exert some amount of control,

like over the stake, right? Like, it couldn't really control, like, the hundreds of node operators that the stake is distributed to. but it could, with some reason, like it could, for example, prevent people from withdrawing at the time. Like, if that's a proposal that, like, you want to make and that passes, like,

the vote on chain. And so it's really like, the question is, how do you fix those holes, right? And like, a very big part is like kind of neutering the ability for audio to make any decisions that would actually be bad for users and bad for Ethereum. And so I think then, you know, there's that that like a tech vector becomes closed.

You know, that said, like even people like on the Lido side or I mean, there were many people, this was a thing that the community was very divided about, right? Like, because even like many people weren't working on Lido,

were in favor of like not self-limiting the growth. And the reason was that the other, you know, the alternative like self-capping was also seen as risky. Like it had its, own risks, right? And that was the idea that if the market really is, like, if the market for stake derivatives really is, we'll not take oil or we're not take most. And if like the good guys basically like safe cap and like the bad guys don't, then you just end up losing the, you know,

the entire market, right? And so that was, I think, a big kind of rationale at the time. And I think we're like fortunate that it didn't play out this way. But I don't think it was a given, right? I think we we ended up seeing that like the demand side of the market ended up fragmenting more than we thought and then that led to like basically like a fragmentation on the supply side as well which we will we can get into I know do you want to talk by institutional staking or LiDOV3 maybe we go to LiD3 first yeah we go to V3 first there's one more thing on like I have on decentralization which is the other big Northstar there's like you know having a good notable set having permissional withdrawals and the other the third and like final one is

having permissionless note operation. So not just the ability for people, like for stakers to join and leave like permissionlessly, but also for node operators to do the same thing. And, you know, that is basically like happening also in major ways. There's community staking module that made, you know, staking permissionless. And it's like slowly being scaled up.

There is also like DVT distributed VALTE technology module. Just the idea that you have, if you have, let's say like, you know, you have like a multicig or five and you have like three notable letters in that set who are either curated, i.e. like secured by reputation or like CSM validators, i.e. secured by a bond, then you can just add two more, right?

And they, you know, they can't control the valid data, right? Like they can, you know, it's like another way to like make it so that people can join permissionlessly. Maybe it was like an even lower bond or secured by like a smaller amount of reputation. but yeah so just the idea that like you can make the protocol more permissionless over time and also the way that like stake is routed across these modules becomes basically like more and more automated over time yeah so i was saying before one staking derivative didn't end up winning

you know it didn't end up growing you know to to like the majority of the market and that that was because it turned out that at the time staking was seen as like one staking setup is like the same as every other staking setup, you know? So then liquidity became a real differentiator and integrations and that kind of stuff.

But as it turned out, you basically saw two big trends and one was the rise of restaking. So the idea that people were staking, like they wanted to stake the EF on the beacon chain, but also then kind of stake that very later again and some setup where they were maybe earning extra

rewards. And Lado did not participate in that. It was like seen as not in, you know, in the values of the protocol to do that, to kind of take, you know, to re-ipoticate people's stake. And, you know, it basically gave rise to this new, to new protocols that did that, that ended up like taking more risk, but also paying more rewards. And I mean, mostly, you know, mostly, you. or like not mostly, but like it was entirely fueled by kind of inorganic growth and incentives. We're talking about liquidity mining in the beginning, right? This is like all liquidity mining in the sense that there's nobody actually using,

you know, actually using that like that stake and is actually paying any like organic rewards and there's also no slashing or anything. So, you know, it's just purely like building the supply side, paying people points and ultimately like eigen layer tokens for example and you know that ended up soaking up a lot of ETH and a lot

that this was like a big use case that that Lido didn't serve and the other was like more institutional forms of staking so I think as as like more and more like institutional players decided to come into crypto

what he ended up seeing was they had different oftentimes you know either like risk management, like more internal-based or like more regulatory, i.e. like external-based kind of constraints and desires about what they wanted to do. So for example, if you have a constraint, like you need to know the not or rather you're delegating to and you actually need to have like a pen on paper like actual legal contact with them, then that like Lido did not serve you at the time, right?

aside from of course running you know the Lidovalidavil and we started using and it's a few years also a while ago now but I think there was one very elegant uh design was the stakewise design and to stakewise design basically allowed you to have different vaults so you know we can have we could have a public vault that people's sake with or we could have a vault just for a particular customer where like no other assets would be and then of course you can have whatever fee agreement you wanted. You know, you could decide or different, maybe DVG for one or not. Like you could have one validated or a different set.

So it was extremely flexible. But then the thing that Stakevise also allowed you to do was that all of these different vaults, and there was no fee from the protocol on any of these vaults. But it would allow people to then still mint a liquid staking token, OSE. that was shared across all the vaults. And then, for example, eigenlayer added Oeuf, right? So then you could say,

okay, I can participate an eigenlayer, right? Or I could do, you know, we have this vault now where you can do leverage staking, right, where you can basically take the OSEF, put it in all they bore against it and loop it. So like that I think was a very, very elegant design that I think also inspired. Yes, absolutely.

I answered the same way that liquid staking had been around like two, three years, at least before Lido launched, like the idea of volts, I think is like similar. I think a lot of people in the like liquid staking space or staking space in general, you know, had been having like the same idea or like, you know, roughly the same idea, but it wasn't the same priority or like timing, I think, for everyone. I think that stakewise I think they

definitely had great products and it's a very strong I would say inspiration for for Lido V3 because so if you

if we kind of from talking about restaking and talking about institutional demand like the problem here was like in both cases

that the staking setup that Lido gave you was not flexible enough, right? It was opinionated, right? So it was not putting your money in restaking. You were getting the same returns as everybody else. You did not, we're not able to choose who your note or whether or what maybe the relays they use and if they use DVT or not, right? So it was all like one big pool. And so I think the idea of Waltz then to kind of put that like on top of what Lido already has is a very kind of organic one in

in the sense that you, when you have that, you've already explained it perfectly, right? Like a vault is just, you know, it's the idea to like create your own staking setup with your own valid, with your own node upredders, and, and then have the ability to mint the liquid staking token,

like in our case, stake ETH against that, with a, like, with a collateral ratio that, that is based on, on that vault's risk profile. And, I mean, I would say that there's a big difference

still between like volts in Lido and volts in steakwise and it's just like steaked-eves like just like a thousand times or whatever like more liquid right like that is that is like a big difference right and so the ability to to be able to min the most liquid and most integrated

staking derivative that is that does make it like a much better product yeah absolutely of course i think where stake beef is absolutely no doubt by far number one right is in terms of liquidity for steak eve and integrations in you know all kinds of places but you know i guess especially defa protocols and yeah for sure so that that is something where it's a very compelling offering. So now basically what that means is anyone or like can you explain to us how it works. Can now anyone go and create a vault or is there some kind of like permissioning or you know only certain parties? So how does that thing work? And then also how does it work with the collateral

ratio right? Because in the end in the end right, one of the challenges is that in or you say like, okay, we kind of manage the risk by, you know, through all these ways, right, through the distribution, through vetting node operators, at least for the curated set. And now if people do their own vault, you don't really have control anymore about what they do. Yeah, so anybody can create a vault. Like a vault is just a kind of immutable primitive. A vault has, you know, someone who can put like the stake into it. it has a node operator that the stake is then going out to and being staked with.

And you can also have a curator. So very similar to like how it works, maybe on like morpho and like, you know, all the new like generation of lending markets. You know, a void can have a, can have a curator that's like setting like the parameters of the void and like. You can have one or or multiple node operators too. I think one.

So did you ask you about not operators or curators? No node operators. Oh, okay. Yeah, I think you can have several. I think it's like, you know, up to you. So what a void doesn't have by default is the ability to mint stake deep. So that is, you need, basically starting with like 0% collateral ratio. Like your, you know, your void is like able to min like 0% worth like stake deep against the collateral that's in the world.

or maybe it's starting from some low ratio. I don't know the exact details, but you know, you basically need like permission from the latter down in order to be able to mint the steak. I think it's working the same way in stake-wise as well. I think everyone can mint OSIEF in steakwise. Now, but I think by default it has a, it doesn't allow you to mint the industry.

entire amount. Yeah, exactly. They said like a very, yeah, they said like a very conservative ratio. And I think that's, that's how it would work as well, probably in Lido. Yeah, so by default and segue,

as I think every vault can mean, I think 95%. And then some vaults, I think it's actually just to course one vault and the Genesis vault. They have some special like, okay, it has to get to a certain size. It has to have some

spice token collaboration. has to go through governance and then they can do 100%. Yeah, and the way that I would like encourage people to think about that is like modules in LIDO, like right now, stake is coming in and then there's a thing that called a staking router and it's like giving basically, you know, the right to like mint stake if against that if two different modules, right? And like that distribution function today is, is permission because it's necessary for risk management. Like there are, we have ideas for like automating that in the future and like moving to kind of a policy-based type of governance

like governance only sets the policy but the policy is then like implemented automatically and you know this is another this isn't technically a module but it's like it's like a module in the sense that like the Dow sets you know risk limits basically for

for volts like volts as a whole and then can set like you know what what types of volts like can get like what type of collateral ratio like what is their minting ability. So that's very important. So that basically will mean like someone creates a vault. I don't know, let's say course one creates a vault or someone else gets a vault.

And then you want to allow this vault to mint OSCE against it. You will go through the Lido governance process to get volts whitelisted for this or approved. I mean, in Lido, we're not fans of like making these things. like very like low level decisions. So I think more likely there's like a governance vote to unlock a certain amount of like overall wall liquidity to minstaked Eve. Maybe like let's say like initially like 2%, then 5% and then 10% right of all stake eve outstanding.

And there is like a committee like a risk management committee that is basically then charged with like allocating that that capacity to different watts. So I mean, you know, if you. You know, that would be your touch point then as well. Like if you're a chorus one and you're launching a vault. And what's the timeline on the Lido V3 rollout and are there different phases to it? So, yeah, we are in a pre-launch phase right now. So I mean, right now there's like a kind of simulated way to do volts.

It's like not technically a vault, but it's like kind of like a trying to simulate that through like off-chain. refunds and like giving you some ability to do custom setups but like the actual v3 and like we're like also working with like many different parties right now basically like um getting them ready to to kind of adopt it when it goes live and like the actual v3 launch is going to be in summer 2025 so in maybe like one quarter cool that's very exciting yeah and i guess maybe that ties in a little bit with the institutional staking side, right? I mean, I think that ties, certainly the whole thing about,

hey, I want to have a contract with my node operator. I want to have an SLA. Like, all of that stuff, of course, becomes possible then. I guess the other big thing is ETFs or kind of sort of products that are traded in the traditional financial world, but that represent, underlying staked Ethereum

where redemption is a big issue, right? So, where basically they generally have to serve redemption is like, you know, T plus one. So someone says, I want to get my EF out. They have to send it the next day. But then that's a problem, right? Because the EFOM bonding period is much longer than that. So then...

Depending on the size of the exit queue, yeah, exactly. Yeah. Yeah, I mean, as you're saying, right, like, so first of all, between like, non-staking ETFs and staking ETFs, like, the first thing to understand about ETFs in general is like they will basically all compete on price. Like, ETFs is like a, you know, an ETF is like a commodity and like commodities compete on price. Like brand plays some role, but, you know, not that much.

And so that's why staking ETFs are going to have a big advantage over non-staking. ETS just because they can, you know, like a non-staking ETF actually needs to charge you like a fee. Whereas a staking ETF, they can actually pay you, right, from the rewards. Like your balance is still going to grow. And they can just like charge a much more like invisible kind of fee from that. And so I think it's like it is actually a very good and like attractive product. And within the set of staking ETFs,

you're basically competing on how much you can stake. Like you want, you're going to maximize like your returns by staking as much as possible. And that in turn is controlled by the size of the door or like how many doors there are. And so if you're, because you need to be able to, as you were saying exactly,

right, like you need to be able to serve the redemption requests when they come in. And when you use like native staking, just like go through you know just put your money directly on the lithium beacon chain you basically have like one door right like the door is the exit queue from the beacon chain back to the execution layer and so that door you know you don't really know how big it is like it's like sometimes it's like you know it can move a lot of money through but then at other times it's clocked and

very often they will clock at the exact time when you like don't you need it to like not clock right because everybody wants out at the same time for the same reasons. And so what staking derivatives give you is a second door next to the smaller like official door. There's like a back door, right? And so that's the idea of, you know, you can't just, you can't just unstake your EF through the beacon chain. You can also sell your steak EVE to willing buyers in the secondary market. and those buyers, especially if the Stakeef is trading at a discount, they have all the reason to wait, to hold it on the balance sheet,

and then maybe redeem it like a week later or like two weeks later. That's like, that's a near risk-free arbitrage trade for them. And so you can expect that the like size of the kind of second door, the secondary market is going to be a really good way to kind of exit your like expand the total amount of exit liquidity that these ETFs have available and just allow them to stake more and thus charge like much lower fees. And so that's why using the exact riot staking setup is that is, I think, you know, that probably is going to be like deciding between winning and losing for these ETIF.

Yeah, absolutely, absolutely. Anything else you want to talk about with regards to institutional staking? I mean, we are in advanced stages of discussion, I would say, with all of the major ETF issuers. And yeah, I think it's, you know, it's going to happen like at some point. I think Lido is in a really good position because nobody else can offer like the size of the door that state these can. Yeah, absolutely.

So maybe we can do a final topic a little bit and talk a bit about Ethereum more generally. I think there has been a perception of a, well, I would say state of crisis, right, a bit in Ethereum. I mean, for one, you've had Ethereum actually performed pretty badly as a, asset for a while, right? So it's massively underperformed Bitcoin, massively underprone, performed Solana for a few years now. You've had a sort of crisis, so big questions around all the L2s and does value really go to Ethereum and what makes Ethereum valuable? And what is Ethereum in the first place? Is it the World Computer or is it this kind of some sort of digital gold like money a bit like Bitcoin and like and then how should the Ethereum Foundation work?

And now you had the leadership changes at the Ethereum Foundation with your executive directors. And so actually speaking with a lot of the seasons last month, I felt there was a really widespread bearishness on Ethereum. How do you feel about things? Yeah, I think I tend to not get so overhyped when things are going well and like mostly focus always on like the negatives. And when everybody is like dunking on a thing, I try to see more of it's positive. So I think I'm more from my character, more of a like flatline, you know, in that sense, like emotionally. And I mean, I think in this in this particular case, it's like a positive.

I think Ethereum has never been like that downbeat. I think as like people were saying. Very often I think like price performance comes first and then people are trying to backfill like a narrative for why has it done poorly. I think there's probably some effect here like that where like something is performing poorly and then people are making up a narrative for why that's the case and that narrative is very convincing to other people.

But then also sell it, reinforce the narrative. When you just look purely at the fundamentals, then, like, yes, like Solana has caught up to Ethereum in some of the metrics that matter.

But Ethereum is also leading in, like, many metrics that matter. In your view, what is, I don't know, if you have, like, on a one or two or maybe max three metrics, that you think on most, important to look at what are they well i think it's like number of like number of vc-backed protocols

launched like on solana versus like ethereum plus layer two so i think would be my this this is a very big one um i think um tvl is another big one that one's hard to fake um like those two those two would be pretty big and then maybe deck something like dex trading volume maybe uh because i'm most care about like finance financial activity uses yeah the thing is like when you i think people are like looking for i mean i'm coming from the m uv space of course and so and like i mean so i mean so i know that like in ethereum we see actually uh like m uv becomes basically protocol revenue as like proposes option off the ride to order transactions in a block. We see that as like a, that's almost like a negative indicator for like how well the chain

is doing. Like if that number is very high, it means there's a lot of MV. It means a lot of users like market makers and stuff are like basically getting their money extracted from them and it's, it's a super bad UX and it's, you know, going to make people like not come back, et cetera. And so we have worked very hard. for many years to build an MEP supply chain where people don't get front run,

they don't suffer like their worst, they don't get sandwiched, they don't pay like their max slippage tolerances. And for apps to build, if you have the tools and the knowledge, etc., to build, you know, MEV resistant applications and stuff.

And then you're like in Solana in a lot of ways, it's like totally like the wide west, like you see them like four or five years ago. where like every user is getting sandwich in like almost every trade, everybody's paying their max slippage. And you combine that with these like coins and like use cases that are extremely speculative, right, like meme coins, where, you know, if I have a very short time horizon, I know I'm buying this thing to sell it like today or tomorrow,

I don't care about as much about my execution, right? So in this case, I'm fine, paying like a 5% transaction fee or like a 10% transaction fee. or like a 10% transaction fee even in some cases because it's so volatile, you know, and my time horizon is so short. And I think when you look at that, it's just like extremely, you know, first it's bad because it's literally like money taken from users,

but it's also extremely unsustainable because a chain that has this level of MEV extraction is, you know, never going to be able to scale to like use cases beyond the ultra like short term. So I'm not saying a problem won't get, solved because I think it will. Like the we know the Gito team

pretty well like they are very like they are aware of all of the problems and like very sensible and smart. But I mean also like the revenue numbers that like Solana are stakers and like

Gito are making are like they're not good and and they're also not sustainable. Yeah for sure. I think that's definitely one place where if you're is far ahead of Solana and where I think there's still a ton of work to do

to make the whole transaction supply chain and MEP more kind of I don't know reasonably managed yeah I agree with that

and I think the majority of the DFI ecosystem is also something where I think Ethereum is still far ahead yeah I mean that's not even, I mean, it's just like, I don't know, buying something on Solana, the other week and like the, I mean, the exchanges are on like a different level of quality, but like not in a good way. I mean, there's like, you know, I'm very used to like

solar, like using Cowstrop, for example, like on Ethereum, like disclosure, I'm an investor, but just like I'm also like a user and like the idea that, you know, I can have multiple solvers compete to give me the best execution, my trade so I'm in deep protected. I can pay my gas fees and like the output, like all of that stuff, right? Like it just doesn't exist, right? On Solana and it's like

not a good experience. Like I know people say they love the UX and I think the wallets are, you know, like, Sandem wallet is a good UX. But just like, in terms of just the basic, just like getting the basics of Defi right beyond meme crunch trading, I think they are still.

have like some ways to catch up and framed a different way like I think the maturity of the defy ecosystem like all in all it theorem is still pretty far ahead yeah I agree with that but to come sort of to this point about you know the sentiment about ethereum and the performance as an asset what do you think it will take for this to turn around and for Ethereum to again be something that, you know, grows up and creates excitement and you feel this momentum and people are, like, bullish about it and they want to buy more of it. And like, what does it take? What does it take? I mean, so I think the same way that like narratives reinforce, like, snowball and reinforce themselves on the downward, they do so on the upward as well.

So, I mean, the way that you would expect this to turn around is like people are really, you know, they are really just like fed up with Ethereum and you know there's like bad news can't really face them anymore because all they expect is like bad news right and so it takes like very little good news to like make people slightly more positive at some point and then like you know you can have a kind of snowball in the other direction I think that's very often like how these things work so you can try to make up like okay we need like fundamental changes but very often there's like, is cyclicality to these things

that shouldn't be ignored. I think fundamentally, like, the leadership changes at the EF, I think that that was good. Like, hands down, I think that,

Ethereum has been, like, I mean, Ethereum is research-led in the sense that, like, it has very long roadmaps and, like,

things are in discussion for a very long time, and it's trying to have a very decentralized development process. It's also research led in the sense that, like, the KWDFs,

and like the EF researchers, they are the ones driving the roadmap. And for a very long time, like industry involvement in that roadmap was seen as not desired, right? And like, you know, you can have this at a time when you're the only chain,

but when you're competing with other chain ecosystems for the same developers, at some point you need to start paying more attention to the ecosystem. And like, I mean, the defy people can tell you like everybody building in defy can tell you like at least one very bad experience about like working with the eF in the sense that like they have either they are like very dismissive of like the thing you're building in the sense that like i love italic but also like

his word carries a lot of weight and so when he's like maybe writing that he doesn't like defy or he thinks that like you know crypto shouldn't be used for that and he hopes that there would be other use cases, et cetera, like it, you know, it feels very dismissive for like the people working on that, for example, right? Or another is like when they have ideas for all the protocols should be improved because they, you know, it's their users, right? They know, you know, they get like a million support tickets for every year. And like, they know what they suffer with.

I mean, then, and you try to turn that like into an EIP, even and you're already meeting a little resistance in the sense that like, are you trying to like co-op the protocol? you're trying to take over the protocol. Like, I mean, those are like very bad experiences. And I think those are things where I think you have now the full, like, recognition that like, hey, that hasn't been maybe so good. And like, what can we do to change that? Like, there's a new energy, I would say.

And like people getting, like, the right people getting promoted into the right positions, including the two new EDs. And, like, especially Tomash from Netherman. Mindy has built in like a very like large and successful organization in another mine and they are very commercially minded right like it's amazing how they have built a successful very big successful company on the back of creating an Ethereum client right which really you shouldn't be able to like commercialize that right but they have managed to like they're not making money through the client but like they have built everything around that and

to me that's like an extremely good sign. Like he has extremely deep roots in industry and knows all of the builders. And so I think you're seeing a new kind of energy around making Ethereum more commercially open and commercially minded. And I think that is, if there was one thing that I would change, then it would have been that for sure. And so, and we're seeing that. So that's very positive for me. I agree. I agree.

No, I think that's probably one of the big things is also just a sense of like, you know, core development moves a bit faster, more pragmatic, you know, tries to, I think some degree of faster scaling, I think is an important one too. That is the other thing, yeah. I mean, if you listen to apps, then yeah, you would have scaled the layer one, right? Like, so there's a kind of related, but maybe it's still worth talking about separately, but I think in terms of roadmap, like, I think there must be an understanding, that there is now an understanding that like you shouldn't give up on the layer one. Like, I mean, a lot of what makes, creates this incentive for roll-ups to build on. You hear you.

Is the quality of the layer one? It's its speed, its finality. You know, it's DA costs and transaction costs. So we need opcodes for ZKA verification, like stuff like that, right? And so, like, there's a bit more of the understanding where, yes, we want to have a roll-up-centry broadband. That means roll-ups are a big group of customers. So let's think about what they need holistically. And a lot of what they need, we can only give them by making the layer one better.

And so I think you're seeing a real revitalization also of that conversation. And so I think anyone who's like buying Ethereum is also underwriting the, they are underwriting the thesis that like these two, like the people who want to push for those two things can basically, you know, break through like the resistance and like, you know, a lot of the entrenched like interests like inside these processes and like this bureaucracy that has built up, right? because Ethereum is a very like procedural kind of community.

And like decision making in a lot of places has historically grown to be very decentralized for better or worse. And you know, in some areas you have like there's the understanding that like this like this group of people may be or like, you know, I mean, the core developers are like the main example, right? Like you have the client teams and like client teams decide what goes into into the fork. And that's, you know, maybe that is like. like one of very big assumption that like needs to be challenged in the sense that like

often you know core developers do the implementing but maybe they shouldn't you know they shouldn't be the decision makers for what actually goes into it because like Ethereum is not the type of protocol where you can have you can be like an extremely talented

engineer but you can also still have that kind of like strategic vision and like keep the old protocol in your head and like know what it needs like at what time like that at least like the of stakeholders who get to make decision needs to be expanded. Cool. I think that's a great note to end on. And I'm also excited to see sort of what this new

energy will bring to Ethereum. So thanks so much for coming on, Haas. We really enjoyed this conversation. Thanks, Brian. It was a really fun. Thank you.