The Wolf Of All Streets - Here Is Why I Am So Bullish On Solana | Austin Federa

Episode Date: February 18, 2024

Join Austin Fedra as he delves into the resilient world of Solana in this podcast journey. From its survival to exploring its ecosystem, including projects like Helium and DePIN, the discussion touches on the evolving landscape of DeFi 2.0, token extensions, and the intersection of Solana with governments and regulations. Tune in for insights on scalability, infrastructure readiness, airdrops, and the potential of Layer 2 solutions, all while contemplating the self-sovereignty and interoperability challenges Solana faces in the crypto realm. Austin Federa: https://twitter.com/Austin_Federa ►► Sponsored by iTrust Capital Invest in Bitcoin, Crypto Assets & Gold with Your IRA Using iTrust Capital. 👉 https://bit.ly/itrust-scott ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘TENOFF’ FOR 10% OFF WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker     ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Solana #Crypto #bitcoin  Timestamps: 0:00 Intro 1:08 Solana has survived 2:48 Sponsor: iTrustCapital 3:47 Solana ecosystem: Helium 7:19 DePIN & migrating to Solana 9:00 Render 11:20 DePIN & satellites 14:25 DeFi 2.0 15:30 Token Extension Program 16:50 Where is crypto’s market fit? 21:15 Solana & governments 22:35 RWAs 25:43 Is infrastructure ready? 27:15 Can Solana handle it? 29:10 Firedancer Solana 30:55 Outages 35:14 Solana airdrops 38:55 Layer 2 on Solana? 41:20 Interoperability 43:15 Building on Bitcoin 45:10 Self sovereignty on Solana 47:40 Regulation 51:50 Wrap up The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

I don't want Bitcoin to take over from the US dollar. As much as I want my Bitcoin to go up, I don't want to be spending it in Gastown and Mad Max. So this is probably the craziest answer I'll give you. You can't stop us. Do you really want to survive the zombie apocalypse? It's just kind of crazy to think about. The pie is so huge that, you know,

we can't waste our time fighting with each other. His purple is so much more vibrant than mine. It's making me feel purple envy, I think. Solana was seemingly left for dead after the FTX collapse with people believing that it was going to zero. They were having outages, a number of problems, but have seemingly risen from the ashes like a phoenix now to be one of the most exciting networks in the crypto space. I spoke with Austin Federa from the Solana Foundation

about everything that's being built and why you should be extremely bullish on the future of Solana. I don't know. I don't know when was the last time that we spoke. Do you remember? Maybe. Six months? Yeah, like nine months ago, maybe. Nine months ago. I don't know when was the last time that we spoke. Do you remember? Maybe.

Six months? Yeah, like nine months ago, maybe. Nine months ago. Well, congratulations. You guys still aren't dead. Yeah. Thanks. Good for you. That's nice.

Because I remember when you were dead. Totally dead. Gone. Yeah. You know, from a market cap standpoint, 100%, the craziest thing about that whole time period was everyone always says, oh, build through the bear, focus on your product, double down. Teams on

Solana did that. And that has become Jupyter and Jito and all these incredible things we've seen since then. So it's pretty cool. The build in the bear seems like such a meme, but you hear it from every single project that has survived, I should say. And now I think the fruits are starting to show, right? I mean, we're starting to get more of a bull market vibe. And we're starting to really see the better projects separating the ones that did put in that effort. Yeah. It's really kind of a superpower. It's hard, right? To get that level of focus and commitment and to say, I'm going to ignore all the price, all the noise, all the

people who tell me to quit my job in crypto and go pivot to AI. And to actually really say like, no, I have conviction about what we're building. We have enough runway to get through what we expect to be the bear market. Like we're just going to sit down and focus. And the teams that did that have, across many ecosystems, have come out great. The folks who started chasing revenue and pivoting and sort of winding down their roadmap, it's going to be a harder climb out, I think, for them. Crypto investors in the United States face some major challenges. One of them is that there's almost no way to get exposure to the asset class inside of your traditional investment vehicles. The other thing is the taxes. They are absolutely atrocious. What if I told you there was a way to solve both of these problems? Well, there is. And it's with a self-directed IRA from

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and not pay taxes when you sell it. You absolutely have to try this if you are in the United States. Use the link down below. It's bit.ly slash itrust-scott. That's bit.ly slash itrust-scott. You have to try this now. So you mentioned a couple of, obviously, the huge projects that have been wildly successful on Solana. So maybe give us a really quick update on what's changed over the past few months, what's launched, what you're excited about, just for those who maybe are not like the biggest Solana ecosystem homers and haven't been following along closely. Yeah. So I'd say the most emergent category has been

D-Pen, decentralized physical infrastructure networks. So over the last year or so, we've had two major networks migrate to Solana, Helium, which is on their own L1 before, and then the Render Network, which was an Ethereum project before. They've both migrated to Solana. And so Helium is a basically cellular network

built by people hosting radios out of their homes and businesses. And they have hundreds of thousands of hotspots all around the world. There's a wireless network. And there's also this IoT network that runs on a spec called LoRaWAN. They actually now have launched a Helium phone service called Helium Mobile. They have tons of subscribers for it, and that actually falls back on the T-Mobile network, so it's a hybrid of these decentralized physical networks and

a centralized network through T-Mobile. But you need that if you want coverage in rural places. But what's really cool about both of these sort of systems is HiveMapper is this user-facing deep-in project that's built both on

Solana and built on Helium. So HiveMapper is the system where you basically put a dash cam in your car and it builds an AI composite version of Google Street View, but with much higher fidelity data on time sequence. You can see what does this road look like in the winter? How often is it plowed? Right? All these questions that you can't answer from Google Street View. And so we're starting to see that decentralized networks can actually compete with centralized networks in ways that people really didn't think was possible just a few years ago. So that's one new category. Yeah.

I love HiveMapper as an example because I was literally in Atlanta yesterday and our driver happened to be a guy who followed crypto and knew YouTube. And he was so angry that he had missed Hivemapper because he said, I'm a driver. This is what I do for a living. I did this deep dive and I didn't buy it. And it went up massively. It was literally yesterday. I was having this conversation with my driver.

Yeah, it's incredible. I mean, this is sort of what I hope to be is sort of the new model of the you know, public market pressures on these businesses to actually perform financially. And you have things like Helium Mobile, which is a cell phone carrier that rewards you for having a cell phone plan. What a novel concept that my phone can actually be mapping the network as I walk around and that data is valuable and they'll give me rewards for it. Or HiveMapper too. I can be an Uber driver and I can make just as much money per hour from dash cams as I can from the actual, you know, money that I get through something like Uber.

And I think we're, I don't know, maybe five years away from people actually being able to say, oh, I'm a decentralized gig economy worker. And everything I do from Teleport to HiveMapper to Helium to a bunch of new stuff that probably hasn't even been invented yet is going to be a full livelihood to HiveMapper, to Helium, to a bunch of new stuff that probably hasn't even been invented yet,

is going to be a full livelihood supported by a decentralized digital economy. I find it interesting that Deepin is a new catchphrase and it's a new narrative. But as you said, these are two previous cycle projects that migrated to Solana and existed and were actually somewhat successful. So why do you think that now Deepin has become its own narrative if these projects have already existed? Is it that people are seeing the success, they're seeing it happen on Solana functioning properly and so starting to build because of the excitement of seeing that? Yeah, well, Helium was the first successful Deepin network and they were built on their own blockchain that had no smart contracts. And so the compromise they had to make was,

how do we build a network that is fast enough to do all the work we need for Deepin and can also run on all these little embedded hardware devices? And the compromise they made was, well, I guess we can't have smart contracts. And the proposition of a Deepin network where you have tokens that represent both data usage and ownership of the network with no DeFi, with no, you know, smart contract system is pretty hard.

And so Helium had this really hard uphill battle to get where it got. But their migration to Solana has meant that now there's a DAO that, you know, can help manage these Helium networks and the subnets. It also means that you can stake your tokens. You can swap from Helium mobile credits to USDC seamlessly on-chain. You can buy data credits seamlessly on-chain. And so I think the real unlock that we've seen in the last, you know, probably two years for Deepin is it's gone from very specialized private blockchains, not private, but very specialized sidechains to being integrated into one global state machine on networks like Solana. And that makes this stuff so much more

useful. And then why did Render make the move? Because they were actually a relatively popular project before as well. Yeah, so Render made the move because, you know, up until this point, Render has largely been similar to Filecoin. Filecoin is not run by home users. It's run by data centers and large institutional providers. And it's a really efficient system for that. But Render's vision is to move it down to a more accessible platform, and they needed lower transaction fees to be able to do that. And so Solana felt like a very good natural home for that. It's funny, I've met a lot of people in the video and production industry just through Breakpoint and conferences and that sort of thing. And, you know, they know nothing about

crypto, but they're like, oh, yeah, I use Render. It's so much cheaper than these centralized Render farms. And it's just like that kind of product market fit is just incredible to see. And if you're adding a $50 transaction onto everything you want to render from gas fees, that is an economic barrier to that product reaching even more people. So what else is being built now in Deepin that you're excited about? Because we haven't talked about it much on this show, to be quite honest. Yeah. So, you know, Teleport is an interesting model, which is not exactly deep in in the traditional sense, but they're building

an open ride sharing protocol where if you're building, you know, a ride sharing network in New York City or Austin, Texas or something like that, you can actually tie into this open protocol. And then, you know,

if I have an app that was sort of built for, you know, one company that's tied into Teleport in a different country, it'll be able to actually route together. And so they're doing things like trying to open up the driver rating system, the payment system by using crypto and sort of, you know, Uber did a little bit of this in the early days where, you know, you could go to a country where Uber doesn't operate, open the app, and it ties into the other country's ride-sharing network from within the Uber app. This is sort of the logical extension to the maximum of that, where we can build a fully open ride-sharing protocol where drivers and users and companies can all tie into that thing together.

So that's one that I'm really excited about. They're sort of in early beta, so there's not a ton of usage of Teleport yet, but they're building out that core connectivity protocol that I feel is pretty interesting to see. Do you think that deep end or decentralized networks can disrupt the largest infrastructure that we have currently that's centralized, or do you think there are limits to what it can actually be used for? So this is probably the craziest answer I'll give you, which is I think the next real space for Deepin to disrupt is space. I think in the physical terrestrial world, it's very expensive to run fiber cables. You have to deal with lots of municipalities and lots of regulation to get the rights to run a fiber line down a road in any community in the United States. Space is not that, right? You could see a deep end project building decentralized Starlink.

And yes, maybe we're three or five years away from a technology standpoint where there's enough of that in open source or in some area where you know you there's actually a technology that can compete with what spacex has built but i think we will see the very much how in the developing world no one has landlines they went straight from no connectivity to everything is wireless based i think we will see the next evolution of the internet infrastructure especially the decentralized internet infrastructure, skip the hard line entirely and go straight to satellite links. It's interesting. You said about five years, you think that a gig worker could effectively work in the decentralized economy and make a living. That's like 100 years in crypto.

Think that's going to freak people out that it's going to take five years. But it sounds like Deepin still is one of those, we get the hard narrative this cycle, but we really see it start to play out and the real evolution and the real use cases in the next cycles, which is to be fair, that's what we saw with NFTs and Metaverse and DeFi all in the past. And I think it's a little different when Deepin still has a cost of capital barrier. And the cost of capital is not buying tokens. It's buying the physical hardware. And that's where I think there are people now,

you know, many of them who their entire business is figuring out where it is economically viable to set up a helium tower. And that is their job. And they make lots of money every year running a small business that basically goes to people and says, you know, hey, your house is in a great spot. Can I pay you 50 bucks a month to put this thing on your roof? And most people go, sure, I'll take the money. And, you know, for the gig economy worker to be able to enter with a very low cost of entrance, I think that's where we're a number of years away still.

But, you know, everything in this space is, I hate to say trickle down, but it is a little bit trickle down, right? You had independent limousine drivers and independent truck drivers far before you had independent Uber drivers. And now even like UPS and FedEx are sort of, you could say, decentralizing, where they're actually using gig economy workers to deliver packages now. So I think we could also see in the near future, a decentralized package delivery network come up that's starting to rival some of the incumbents as well. That's really interesting. So moving on from dPin, what else is exciting you that's being built right now? DeFi is really, really exciting at this point. I think there's sort of a meme of

DeFi 2.0 that probably started before DeFi 2.0 really existed. But on Solana, we've seen everything from stuff like Jupyter Aggregator, which is a really advanced routing network for orders that'll hit multiple liquidity markets to get you the best price that you can get on chain. That's quite interesting. But we also have this sort of idea of like hybrid DeFi coming out. So something like Credex is a really great example of this, where they are doing loans in Latin America, and a bunch of that is off-chain, right? But what they're using blockchain for is payment efficiency, and they can get, you know, 50 to 75 basis points of savings

by using blockchain technology, which is pretty serious if you're talking about, you know, the size of loans and lending that can take place. And then you move into some of the other sort of new uses for this technology where we're talking about real world assets. And that's where we get into the whole conversation around token extensions, which is a whole new program that's been shipped on the Solana network that's really designed for institutions

and businesses looking to build on blockchain. Is that for tokenizing real-world assets specifically? The token extension program is sort of the next iteration of the existing token program. It adds a bunch of capabilities and features that were, it was about a two-and-a-half-year project by the engineers at Solana Labs to build a system that was really designed to eliminate the need for anyone to ever build a private blockchain. So it adds a lot of permission structures to tokens that issuers can now issue tokens with that are not necessarily the most crypto native features, right? There's something like a transfer hook, which is a program that sits in between a transfer that can allow or deny the transfer based on any sort of on-chain criteria.

That may not be the most degen thing in the world, but if you are trying to do something like tokenize Tesla stock and you have a legal requirement to keep an accurate record of every holder of the token, this is a really powerful feature to be able to build stuff like that on public permissionless blockchains and not have to have it side on a private blockchain or a subnet or some other type of system, which isn't

actually publicly accessible and isn't actually permissionless anymore. Yeah, that makes perfect sense. I kind of alluded to the fact that maybe Deepin takes a few more cycles. Are we now going to see, though, the things that were hyped in earlier cycles and never really saw their full promise coming to fruition now? You mentioned DeFi, obviously, DeFi Summer, NFT Summer, Metaverse Fall, gaming, right? I mean, gaming was the huge narrative of the last cycle. Didn't really come to fruition at that point. Is this the time? Are we going to see some of these things start to actually hit mainstream adoption?

It's really hard to predict the future when it comes to things that are good ideas, but don't necessarily have the economics behind them, right? I think the highest product market fit we've ever found in crypto is stablecoins, right? Like without a doubt. And I think what we've seen is Deepin has gone from something that was a theoretical product market fit to a real solid product market fit with things like HiveMapper and Helium. DeFi has strong product market fit as well. Games, I think it still is to be determined. There's groups like Star Atlas

that are, like, hardcore committed to building fully on-chain games. And, you know, when you're willing to embrace the vision that completely and seriously, I think Star Atlas is, in my opinion, the best vision for what an on-chain gaming company actually looks like. Many other companies are not taking their blockchain integration as seriously. And I think a lot of those types of gaming adaptations are still in the hype experimental cycle more than anything else. But we're, you know, as you're talking about with NFTs, like the major unlock for NFTs is not necessarily cartoon pictures of monkeys on the blockchain, right? It is a time when you start to see comic books being created as NFTs.

And that is more almost a licensing and DRM protection system than it is anything else. And so we're seeing like the entire creator economy kind of in crisis now as ad revenues start to drop, as platforms try and squeeze even more money out of them. Patreon takes more than a 10% cut. You know, even if you decide I don't want to work with YouTube, I don't want to work with these other platforms, the sub stack model is slightly starting to break because most content is not worth $10 a month. Most content is worth significantly less than that. And so, you know, if you look at what Drip House is doing, with their sort of flipping the NFT model on its head, instead of saying, we're going to give away lots of NFTs for free and the time-based scarcity becomes the thing that people look for,

that starts to look like a very different business that potentially can support an entirely new class of creator. I'm very interested to see where that goes. I think it's very early in the process, just to be clear. But we've gone from a place where NFTs are doing what modern art does, which is store value for people who want to store value, to something where it's creating real new business models. And for me, that's the most exciting part about crypto is when we move from financial speculation to disruption of business models and the creation of more fair economic systems. I remember when I first heard about NFTs, what excited me was mortgage on the blockchain, transferring my car title without a third party, and then all of a sudden it became PFPs. To your point, and it sounds like now we've come back down to earth and we're returning to the actual compelling use cases and the utility. So to go full circle on this, California has a

car deeds program they're piloting, which is based on a fork, a private fork of the Tezos blockchain. Token extensions are designed so they could do that on-chain on Solana if they wanted to, on a public blockchain with all the wallets you know and love, you know, with the ability to actually potentially buy and sell your car on-chain and have that be reflected in a title change, right? That is the vision here where you don't have a private system that is running this. You end up getting full composability. Like you could see a future where there's a, you know,

one of those websites where you say, what's my car worth? Here's my NFT that represents my ownership. And you'll get an instant price and you can actually sell it. And then within, you know, 10, 15 seconds, the actual legal record of who owns your car has been updated.

And that's like the point of the token extensions program is to make something like that possible on public blockchains. So like, I'm totally with you on that future. I think we, for a long time, we haven't actually had enough compliance tooling for people to be able to build the type of vision we've always sort of had in our heads. Are you seeing governments and large institutions

coming and looking at Solana to do the boring things that are actually going to probably drive all of this? Yeah, absolutely. I mean, Paxos has already minted their Pax dollar on Solana using token extensions. And they've introduced new systems there that they are not able to do elsewhere. GMO Group has done a USD stablecoin on Solana

and a JPY, Japanese Yen, stablecoin on Solana, both of which make use of token extensions. And these are things that their compliance team said, hey, we actually can't launch these products unless we have the tools that token extensions bring us. And so that's kind of a really big, nice step. There's a ton of real world asset issuers that are now talking with us about, you know, launching funds and, you know, tokenizing various types of offerings, because they can do it on token extensions, as opposed to having to do it on a private blockchain. And so it actually lowers the barrier dramatically because if you have to run your own blockchain,

that's a pretty intense endeavor. Or if you have to pay someone to run a blockchain, that's a pretty expensive endeavor. So public blockchains are actually, you know, it is as much of a jump to go from the private data center to the cloud as it is to go from a private blockchain to being able to build this stuff on a public network. Yeah, deep in one of the most compelling narratives, RWA is the other one that you keep hearing for this cycle, which I also feel like is five, six, seven years away. I think RWAs are sooner. I actually really think that, you know, you can hold me to this. I think this time next year, we will have some pretty high-profile RWA projects on Solana that are doing things like treasuries on-chain. They're doing things like gold on-chain.

Yeah, I think we'll have them. I just mean that they will largely be adopted. We already have Franklin Templeton tokenizing treasury bills, right? That's $300 million or so I think they have. Right. I think the difference there is that is not on a public blockchain. That is on a permissioned, access-controlled, gated, you know, private subnet. And also, like, it's not really fully on-chain, right? I think that's where a lot of these things

come into play, is the unlock there is when you can trade something like the Benji token, you know, all I have to do is go to the Franklin, here's the come into play is the unlock there is when you can trade something like the Benji token. You know, all I have to do is go to the Franklin. But here's the hypothetical future we want to see with token extensions. They require KYC. I go to the Franklin Templeton website. I pass KYC. I sign something with my wallet and suddenly my wallet is approved to interact with all the tokens that they have issued. And so I'm able to go to Jupiter. I'm able to go to a DeFi market and say, hey, I have USDC. I'd like to buy this offering that they have created.

Maybe it's a REIT, right? Maybe it's some other type of thing. And because my wallet is already approved for the interaction, all the programs on chain can say, great, the transfer hook on this transaction says, yes, my wallet's approved. The compliance checks are passed.

You've passed KYC. We're going to migrate the ownership over now. And because it's all on blockchain, I'll get my proportional dividend for what that REIT pays out based on how long I've earned that token automatically on chain without any human interaction, without any paperwork. And, you know, in the back office at Franklin Templeton, they can say, this wallet address is linked to Austin Federa. He's passed KYC. We can update our ownership records to comply with all the government regulations as well. And we can even issue a 1099R at the end of the year because we know all this information already.

That's pretty insane. You're saying that could be a year, two years away? That is all capable to build today using token extensions. And we have issuers talking to us who are very excited to actually start building this stuff and start issuing tokens using these frameworks. How large of a market is that potentially for a single blockchain? I mean, real world assets are actually a larger market than non-real world assets in the TradFi space. We kind of forget how big commodities and real estate and all these other things are compared to, you know, equities. So I think we could see this as large of a market as DeFi is,

if not larger. So huge. Huge. And I don't think, you know, it'd be great if 95% of it happens on Solana, but I think this is going to be an industry-wide trend over the next year or two that the chains that have tooling and technology to support it are going to see as big of inflows wasn't there, that we hadn't built the tools that were necessary. Do you feel like now we have the infrastructure and the tools necessary to do most of what institutions would want to do at this point on-chain? Are there gaping holes and places that we just haven't even begun to

build what they'll need? I think the token extension model is the only model I have seen for public networks to be able to do this sort of thing. My hope is actually that much as the Solana community has borrowed a ton of great ideas from the Ethereum community and the Cosmos community, the idea of token extensions and these sort of additional safeguards around token issuing are something that we see brought to many networks. And that can sort of become an idea for how this stuff can be done more broadly. So, you know, we are getting close on Solana, I would say the tooling now exists, and I hope to see it exist on most chains by the end of the year. Because, you know, this is this is one of those real situations where like a rising tide lifts all boats. Let's borrow the best ideas from all these networks.

And at the end of the day, there's a lot of friendly competition, let's say, between different blockchain networks. But the pie is so huge that we can't waste our time fighting with each other. I 100% agree with that. But I've interviewed Toli. We've spoken before.

There is a belief that Solana could handle it all if you had to. I think that's true, right? This is why I work for this network and why I don't work for a different network, is because at the end of the day, I think the Solana technology stack, the vision of one global state machine synchronized as close to the speed of light as possible, that is sort of a very practical approach to engineering that does not pretend governments don't exist and actually builds tools that token issuers need to be able to stay compliant, even though I wish they didn't have to stay compliant, is the right approach to bringing

this technology to the most number of people around the world possible. And how much does Firedcer make that a reality? So FireDancer is probably the most important long-term technology that is hopefully shipping to Solana mainnet this year. I would say token extensions is the most important short-term technology, but over a multi-year time horizon, the speed and performance that you get from a total rewrite of the validator client in a new high performance language of C by an independent team, that stability, that technological security is really valuable to the network over the long term. I actually just got back from, you know, a bunch of core engineering work meetings that we're doing, thinking about, you know, how does

Solana become a multi-validator client world with these independent clients? And it's one of the things I am most looking forward to for the end of this year. And you think that that happens Q4, Q3? Yeah, that's the goal. I mean, look,

the only accurate prediction in blockchain is nothing ever ships on time in blockchain. So don't hold me to it. You can even just say technology wildly. I think it's worse in blockchain because it's one thing when one company controls the whole system and they're able to make that.

Blockchain is not that way, right? And so decisions that Anza and Jito and Syndica and the Slana Labs team are making impact the FireDancer team, decisions they make impact everyone else's clients. Yeah, I've been saying for a long time that I think the largest problems in blockchain over the next five years are not technological,

they're human. It's governance. It's classic open source software management. Like what file format is our Linux system going to use? Linux kernel wars and file system wars are real. It's coming for blockchain too. But the real promise of FireDancer is a second validator client

has a huge amount of resiliency and security to the Solana network. We're going to be the only network after Ethereum, the only smart contract network after Ethereum to have two independent validator clients. So, you know, this is one of those really important technological foundations. I don't think Firedancer is necessarily going to mean a dramatic change for users on day one. It's more of a long-term initiative. Right. But it allows the scale that you would need to effectively do everything. Yeah, and also a lot of the changes

that are being made in FireDancer, they're figuring out better conceptual ways to do things. And so those changes are then being built into the client that Anza is building as well, even though it's a different language. Because, you know, it's sort of the classic question

of why is there a beta tag on Solana and it's because the vision is not done. Solana 1.0 is still being built and that is probably a process that finishes the next year and then we move on to Solana 2.0. But that is sort of the vision there is that this is a network that is still evolving and still making changes. I mean, when you describe it as Solana V1.

Yeah. I have to imagine that means there's an element of moving fast and breaking things, right? And so you guys had the outages, obviously, last year, which interestingly, when prices were down, everybody seemed to care massively about. But now everybody's hyped, obviously, about Solana and you had a short outage recently.

And it was almost no reaction, right? You got the, I think it's interesting. You have a short outage recently, and there was almost no reaction. I think it's interesting. You have the people who hated no matter what we're going to hate. But now you had a lot more supporters in the face of that happening from an outside perspective, and it seemed to be completely shrugged off. Yeah. I want to be clear. Outages are unacceptable.

There should be zero downtime on a public blockchain that's trying to do what Solana is going to do. It is unfortunate. I will say the period before the outage was the longest period of stability the network had had in its existence, which is great to see. And sort of, you know, if we sort of squint, it's like, oh, the outages are getting less frequent. We're moving, the network is getting more stable, we're moving in the right direction. You know, reliability and uptime is the highest priority activity for the engineers building the network today. And so, you know, this is one of those things where I think we are getting closer to being

out from under it. And hopefully we reach a state soon where, you soon where the Solana network has high uptime, high resiliency. And if there are incidents that occur, the time this time, I think, was about five hours to get the network back online. It would be awesome

if we can get that down to 30 minutes. Yeah, when you have a five-hour outage, do you start to get any inbounds from people that are building saying, what's going on here? Are we going to have problems in the future? Maybe this isn't going to work. Do you have to answer a lot of hard questions when that happens? Or do people just sort of understand this is part of growth? right there there can be an intellectual and academic understanding that when you ship features as fast as you do in a network like solana that's part of how solana is able to be where it is today is to to not worry a ton about is everything perfect and instead to worry about how do we get stuff out that people can use um at the same time you know there's a very human response of like why is this down? This shouldn't be down. Blockchains should never go down, which is a fair statement that I also agree

with. We have to back into what is practical, though. A blockchain that never goes down that no one can use is not a useful system. A blockchain that goes down too often is also not a useful system. And so I think every network out there has some Pareto optimal point that they've picked between scalability, usability, and liveness. And I think over, you know, Solana is moving in a direction where the engineering is prioritizing liveness and uptime, you know, more than it used to be, I think is a fair

statement to say. And, you know, the goal is obviously zero downtime. But if zero downtime means that the network does not live up to its promise of continuing to become faster and more usable and ship new features every year, that's probably the wrong tradeoff. Because, you know, we have probably at most 1% of the global population using blockchain on a weekly basis. We need that number to be bigger. And so there is an optimal point there to aim for. And, you know, that is an open conversation among many different people in the Slana community

about what the right method to hit there is. But AWS had some outages in its early days, and even still continues to, and it still is the dominant cloud provider out there. And so these systems actually, I think, have to be useful enough to be able to handle a little bit of outage. I think you just created a new blockchain trilemma. Yeah. Security speed and cost and now we have liveness. Yeah. Yeah. Liveness, scalability, and some metric of usability, whether that's fee, whether that's throughput, whatever it looks like. I think that we do really have a new trilemma there. That's not a bad way to put it. It's really interesting. I want to talk about airdrops. I'm not the most... I'm a boomer. Let's just say that. I'm a crypto boomer. I stick

to what I know. I haven't really gone down that rabbit hole. I'm too busy. It seems to be driving a ton of the TVL on Solana. And I think people are excited about airdrops and other networks as much, but it seems to really be finding its footing with you guys. Is this a transfer of value? Is it helicopter money? I find it hard in my mind sometimes to wrap my mind around how something launches and has like a $5 billion market cap, which is more than Levi Strauss or something, right? So maybe I'm just not framing it in the correct way. I just need someone to really explain this. Yeah. So I think one thing to understand for the airdrop phenomenon is 98% of airdrops on Solana, you never hear about.

My wallet is full of weird meme coins that never catch on, that the network is cheap enough, they're just going to airdrop into my wallet. You know, I could read you a list of 100 probably that are just like random tokens with no market cap that never happened. I think what we're seeing when people talk about airdrops on Solana, it's often talked about in this sort of dismissive way. But if you look at actually like what are the protocols and projects this year that have done notable airdrops?

I think Pith was one of the first, which, you know, Pith is the first high-performing Oracle system to ever exist. It is, you know, integrated into tons of different chains. There's over 160 DeFi applications that rely on Pith for their Oracle solutions. That's a project that started on Solana. And so that is an airdrop based on real utility and past usage. Jito, very much the same way. Jito

is, you know, Flashbots plus MEV plus liquid staking plus a validator client plus stake net. You know, it's a very complicated, very high-performing infrastructure layer, plus Lido, basically. And if you think about, you know, what is that valued at, that's a question for the VCs to determine. But that is not a value-less airdrop, right? And Jupiter, very much the same way, right? Jupiter's volume rivals that of Ethereum DEXs.

And so, you know, a lot of that stuff here is, yes, the airdrops get a lot of attention. Yes, it's sort of fun to poke fun at airdrops. But fundamentally, these are projects that are delivering real value to users on chain. And, you know, getting rewarded for being a part of that and helping build the future of that protocol is a really strong feature.

I mean, there is some clear logic to building a product, getting users, getting them passionate about it before they have the access to it, as opposed to just launching and putting a token out there and then never building anything or building it years later. Completely, right? And sort of this idea of a retroactive airdrop based on contribution and usage is not a meme. It is real. It is how you build and reward

community. And we've seen a lot of actually very successful protocols do this over the year before it started happening on Solana. I think the difference on Solana is you can do something like the Jupyter AirDrop, which had, you know, over 300,000 people claim in the first 30 minutes of that claim. That is a volume that you can't do on any other blockchain. And so it changes the economics of how an airdrop works from maybe a 10,000 contributor base to a million users all are able to receive and claim an airdrop.

That's a pretty powerful distribution incentive. It is. So will we never see layer twos on Solana? Or should I never say never? Never say never, right? I think if we're at a world where there's, you know, a billion people each day trying to transact on a network like Solana,

you're going to need some amount of layering. And so, you know, layers are not inherently bad, but the goal of every system should be as few layers as possible. And so if you try and maximize the layer one network of Solana for high throughput, high scalability, high transaction count,

and then every subsequent layer built on top of it also has those high performance characteristics, you just need fewer layers. And fewer layers means fewer middlemen, fewer layers means fewer points of failure, fewer points of centralization, lower fees, lower value extraction on a user's transaction. And so, you know, we fast forward five years, Solana has been unimaginably successful. It's possible something like Helium is actually run on its own layer on top of Solana.

But that is really something that we should have as few layers as possible in the mix is something that I really truly believe. And so we are nowhere near the place where you need layers on Solana. I mean, I remember interviewing Sandeep from Polygon and him saying we definitely get to layer 4 and layer 5 and layer 6.

I think we get to layer 30 at some point soon, right? And maybe that works, right? Maybe that works in that area. We're already seeing massive fragmentation between just layer 2s in Ethereum. I don't know what it's going to be like to transact between

a layer 4 built on Optimism and a layer 6 built on Polygon. It's just kind of crazy to think about. Thankfully, I don't need to worry about it, right? But that is for those communities to figure out. And who knows, maybe they come up with an incredible, brilliant solution for that that actually solves the UX problems,

solves the bridging risks, solves the cross-messaging risk. That would be a huge boom for the industry, right? I think actually, like, this is the thing that many people in crypto Twitter don't understand or sort of refuse to accept, which is like, Solana actually wants more competition. More fast blockchains means more people are thinking about things you can build on fast blockchains, which means more awesome, compelling use cases. This is the best part of capitalism is open competition makes everyone's products better

and it's just a boon for users. So I'm all for it. With the belief that everything could theoretically be done on Solana in the future as you scale, how much concern do you have to have with interoperability? You know, interoperability, I think Wormhole has done a really great job on interoperability. You know, that is sort of, and, you know, Alloperability, I think Wormhole has done a really great job on interoperability.

You know, that is sort of, you know, Allbridge and Dbridge are doing similar things. But at this point, you can get from Solana anywhere, I think, except IBC via a direct bridge. And the IBC support is coming. There's a bunch of folks working on that. And so at that point, you know, what is sort of my ideal end state? It's that if you are a Ethereum NFT project, and you love Ethereum, and you want to be on Ethereum, and you, you know, each of your NFTs is valued at $150,000, props to you, stay on the Ethereum L1. Do your token airdrop on Solana. Do your derivative drop of 100,000 collection

as opposed to a 10,000 collection on Solana. Use the network as an execution environment for whatever you need that needs to be low cost, fast and scalable. And then if people want to bring it back to the Ethereum layer one or something like that in the future, they can totally do that.

But this is where I think we are going to see networks begin to bifurcate into, you know, very specialized networks like Arwe of an IPFS. Those are settlement networks. They're built for one thing particularly. You know, sorry, those are storage networks. They're built for one thing particularly. If you want Bitcoin as a settlement layer, if you want Ether as your settlement layer, awesome. You should still do all your transaction execution on Solana. Solana is the best place to trade Bitcoin, hands down. It's decentralized custody Bitcoin via threshold network.

It is microtransaction fees, but you can still get access to Bitcoin and you can obviously still pull the BTC out natively if you want to. That is, I think, the real vision for how these networks all become interoperable. What do you make of everything that's being built on Bitcoin now? We'll see. Honestly, it's not something I've done a ton of research into. I think what we saw with Bitcoin Lightning was sort of interesting in the early days, but there's better systems out there now.

Bitcoin L2s, like, we'll see. It's not something I'm spending much time tracking or watching. But, you know, if there's credible theses on how you can build cool stuff on Bitcoin, power to them. Did you start as a Bitcoiner? Not really, right? I think, you know, honestly, my initial intro into this space was 2016 working for a fintech company, 2016-17 working for a fintech company and getting sort of assigned to work on a project to build a borrow-lend token on Ethereum. And that was kind of my first real introduction to the space and sort of got the bug and, you know, I've been there ever since.

I did buy some Bitcoin in the early days and get rugged on Mt. Gox like most people. Oh, wow, you were early, early. But yeah, but, you know, that was not a galvanizing force for me. That was a, oh man, this technology is not ready at all. I'm going to ignore this stuff. And look, to my financial detriment, it would have been great if I bought a bunch of Bitcoin in the early days and kept it after I got rugged. People come to this technology in their own time, in their own way. And I think the goal of this tech is to convince more people that self-custody matters, that taking control of your financial freedom matters.

And there's a lot of great downstream effects from there. I'm one of those weirdos who really thinks that crypto can fix politics, not by getting blockchain into voting or anything like that, but by getting people more active in ideas of self-governance, taking more accountability, feeling the more power to get involved and to fix things. I 100% agree with that. How self-sovereign do you think somebody will be able to be solely with Solana

and when? So I've always taken issue with the Bitcoin bunker boys because like at the end of the day, like, yeah, if there's a authoritarian takeover of the country and like we're in a nuclear war situation in World War III, like, I don't know if the Bitcoin hash rate's really going to, you need the internet for Bitcoin hash rate to survive, like, you know, all that stuff. So I think there's like anyone who sort of says crypto is a way to opt out of the monopoly of violence of the state. I don't really buy that argument. But I think self-sovereignty model is really important for your ability to move around. We saw that, you know, when Russia invaded Ukraine, a bunch of like blockchain devs in Ukraine were just able to get up and leave with most of their

life savings and most of their debt were with them because they could fit it on a ledger, right? And so suddenly that portability problem is really, really important. So I think for folks in less stable political systems, for folks who are maybe trying to flee the current country they're in, crypto is an amazing asset for that. It's less compelling in the United States, at least for now, but who knows? Maybe biology is right and someday we'll all be fleeing the United

States too. Hopefully not. I'm a USA maxi. I still think it's the best country. If we go everything goes, man. I know, right? Last to fall. Yeah, it's sort of the whole thing about like,

do you really want to survive the zombie apocalypse? Or do you want to go in the first two hours? No, and I've always said, as much as I want my Bitcoin to go up, I don't want to be spending it in Gastown and Mad Max just so that I can be right. You know what I mean? Yeah, right? And this is the hope is that like all these technologies, what they do is they actually force the existing political systems to behave better. I don't want Bitcoin

to take over from the US dollar. I want Bitcoin to be a check and balance on the US dollar the same way that the judiciary is a check on the executive branch and the executive branch is a check on the legislative branch. And, you know, this model we have of like checks and balances in open political systems, it's the best model anyone's ever come up with. And it doesn't work great right now. But I think actually, if we have pressure from things like Bitcoin and Ethereum and Solana, it'll make these political systems we have actually act more fair, more open, and just a little bit better. The same way that the threat of regulation has made Google and Apple and Facebook start to act a little bit better. Has the threat of regulation changed anything for you guys at Solana?

The token extension program is a direct response to regulation. It is a, you know, for years, I think a lot of people in crypto were like the Tornado Cash model is the one that can work. Just build decentralized code, ship it on blockchains. You can't stop us. This is sort of like the Edward Snowden approach to stuff.

And like, I love those people. I think it's really important. I want them to keep pushing. But if we can get 30% closer to that vision by building something like token extensions and being able to have people have access to US treasuries everywhere in the world, that's actually a huge boost.

That's a huge gain. And we can do both things at the same time, right? We can still keep pushing this like permissionless decentralized future and we can build tools and technologies that comply with current rules and regulations, but give a much broader part of the world access to the financial freedoms and power

that we enjoy in the United States. We got to do both. I'm assuming, yeah, I'm assuming last time we spoke, it was in the SEC regulation by enforcement. It attacked probably Coinbase and Binance, Solana, and a number of other coins have been passively mentioned as unregistered securities. Since then, it seems the SEC has done nothing but take losses. So at least that environment has seemingly improved. Yeah, I mean, look, I'm not a lawyer and there's not much I can say about how these things are going.

But I think, you know, a lot of us expected Ripple to come out differently than it did. And to see the, you know, the Bitcoin ETFs are also another great example of this, right? Like, the United States does a pretty good job of figuring it out. We are not quick. We're not efficient. But over the long term, things tend to work out well. And it takes a lot of blood, sweat, and tears

to get there. But I'm not giving up on this country yet. I 100% agree with that. Like I said, there's nowhere else to go anyways. Yeah. And we also both agreed that stablecoins have kind of been the killer app for crypto thus far. And to be real, that's hyper-dollarization. Yeah. And look, I'm super supportive of the

payment stablecoin legislation that was kicking around in the House and Senate last summer. I think we should have stablecoins that are certified by the US government as saying, there's a full proof of reserve here. We are fully confident in the system. And you know what? We're even going to FDIC insure your stablecoins. Not from theft, but from, you know, Terra, for lack of a better term. And that is a, you know, yeah, like my dog money shouldn't have to comply with payment stablecoin legislation. But if I want a U.S. dollar on chain, like you're going to have to let a little of Uncle Sam in too. Just this week, Jerome Powell at a closed meeting, Congress, senators or congressional leaders

said that we were very close to stablecoin legislation and that we needed it, which I found very surprising that he was on top of that so much. Yeah, I mean, I think setting aside partisan politics, McHenry was a really great voice for the industry in the United States Congress. And with him stepping down, it's time for new voices to rise both on the left and the right. This is a bipartisan issue. Coinbase has done amazing work just getting people to realize how many Americans own digital assets and own crypto. And it is big. If we can have in 2024, crypto be a voting block, even just a small voting block, right? We could be in a place where the grassroots crypto movement does for blockchain what the grassroots environmental movement did for climate change legislation. Yeah, let's hope, man. Well, this is amazing. I always love sitting down with you. I would grassroots environmental movement did for climate change legislation.

Yeah, let's hope, man. Well, this is amazing. I always love sitting down with you. I was saying for anyone who's listening and can't see, his purple is so much more vibrant than mine. It's making me feel purple envy, I think. But Austin, where can people follow you and keep up with what's happening at Solana? Yeah, best place for Solana is at Solana on Twitter or X or whatever you call it these days. I'm Austin underscore Federa on that same platform. You know, for developers looking to build stuff

on the network, solana.com slash developers is an awesome, you know, place to get started. We've partnered with a ton of awesome educational organizations for a bunch of self-service workshops too. Free Code Camp has I think a hundred hour Solana tutorial program at this point if you want to go deep. And yeah, I'd say just like get involved, start building stuff and yeah, build the future.

Thank you so much for your time. I appreciate the update. Keeps me staying bullish on Solana, certainly. Always fun to talk with you. Have a good one.