The Wolf Of All Streets - The Future Of Solana | Anatoly Yakovenko

Episode Date: September 13, 2022

I finally had the opportunity to sit down with Anatoly Yakovenko, founder of Solana. We talked about everything: the centralization of Solana, how Solana competes with other layer 1 blockchains, and why it is crucial to cut operational costs to boost adoption. We talked about security issues and how the upcoming release of the first Solana phone, Saga, solves them. We further discussed how Anatoly’s background in the Soviet Union led to his deep interest and passion for decentralized systems and Bitcoin. This is a well-rounded conversation with one of the leading minds of crypto. Anatoly Yakovenko: https://twitter.com/aeyakovenko ►► Get 20% off on your ticket to W3BX. Use my code: WOLF20. Register here: http://web3expo.live/  ►► JOIN THE FREE WOLF DEN NEWSLETTER https://www.getrevue.co/profile/TheWolfDen  GET UP TO A $8,000 BONUS IN USDT AND TRADE ALL SPOT PAIRS ON BITGET FOR ZERO FEES! ►► https://thewolfofallstreets.info/bitget    TRADE ON THE WORLD’S BEST DEX, BULLISH: ►► https://thewolfofallstreets.info/bullish/youtube  Follow Scott Melker: Twitter: https://twitter.com/scottmelker  Facebook: https://www.facebook.com/wolfofallstreets   Web: https://www.thewolfofallstreets.io  Spotify: https://spoti.fi/30N5FDe  Apple podcast: https://apple.co/3FASB2c  #Solana #AnatolyYakovenko #Crypto 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've often discussed the idea of living in a multi-chain world where each blockchain finds a specialty and then they work together interoperably. That's usually the vision that's presented even by the founders of these blockchains. Well, today I spoke with the co-founder of Solana, Anatoly Yakovenko, and he had a different vision because he believes that Solana can be the one blockchain that eats the world. Listen and find out why. There's been a lot of talk about layer one wars, right? It's become almost a meme in the crypto space. The idea that like Lord of the Rings, there could be one sort of chain to rule them all. It's my opinion we'll probably live in a multi-chain world, but I would love your take on where each of these chains sort of fit in and what the future looks like.

I can see both options being on the table. I think a lot of reasons why it's a multi-chain world is because these two systems are kind of like databases. They're kind of boring. And those typically, it's really hard to build a moat. It doesn't really matter for a consumer what database they use in the background. The other reason why there could be a moat is I think kind of the native crypto narrative, like the idea of digital ownership, store of value, all those things really do tie around security of the chain. And if that's the case, then there could be moats around Bitcoin, Ethereum, decentralization. Solana is trying to be a very decentralized chain. There's a lot of effort that's put in

by the community to do so. My take is that decentralization to centralization is a sliding scale and that most things exist in the gray or are moving from centralized to decentralized. And the community sort of has this bipolarity where they want it to just be one or the other and there's nothing in between. So Solana obviously has taken quite a bit of criticism for being too centralized, but you're probably, I would imagine, on that sliding scale. Yeah, the main difference in Solana between something like Ethereum and Bitcoin is the cost of the hardware to run the network is high. So I don't know if you remember Vitalik's trilemma, performance, security, decentralization, the cost of the hardware, throughput, and

latency, basically. You can only pick two unless you want to make the hardware expenses which is what solana chose so if we make the hardware expensive we can actually have both high number of nodes high number of participants in the network and high performance but that goes against i think a very core theory and value which is you want to lower the barrier to entry for anybody to participate in the network from a hardware perspective. And this is where a lot of the arguments like, well, why do they get to decide what's the lowest cost of hardware, right?

And like the differences between validation, verification, and all these other things. My kind of belief is that if the network is permissionless, that anybody can enter it. Like I can go and participate in it without any kind of like needing to ask anyone. It doesn't really, and it's useful. It doesn't really matter how much it costs because it'll get cheaper over time. Like it's because there's demand to go participate in it. It's just the way that computer hardware gets really like 50% cheaper every two years. It's like the thing that humans have figured out. The one thing that I could bet on humans being

good at is making cheaper and cheaper. From my perspective, like I think the most important thing that we can do is make sure that the protocol is permissionless, that anybody can enter and participate in it and then figure out what are those like really hard to find use cases that somebody figures out the really complicated thing about cryptography sets up a seed phrase and actually uses the network that that's that's like the real challenge right yeah i remember when my dad brought home a commodore 64 in the 1980s and that thing cost thousands of dollars and And that's not even adjusted for inflation. So that POS, not proof of stake pieces.

So that was like a $30,000 computer by now, and it did literally nothing but run a print shop. But I think technology is inherently deflationary, as you said, and the price will obviously come down. What's better than listening to the Wolf of Wall Street's podcast? Listening and watching the Wolf of All Streets podcast live. Well, they say what happens in Vegas stays in Vegas, but this time that's not the case because I'm hosting a stage at a conference from October 10th to 13th. That's the WebEx conference. I'm going to be bringing you live podcasts,

live panels, masterclasses from the leading minds in the industry. This is going to be absolutely epic. It's going to be live streamed, recorded, and presented to you live. You can come have a happy hour with me, eat dinner, potentially play golf, and watch all of your favorite content being recorded in real time. Guys, the link for this is web3expo.live. That's web3expo.live. Use code WOLF20 to get 20% off your ticket. WOLF20 for 20% off your ticket. Guys, let's hang out in Vegas, October 10th through 13th. I think you kind of pointed out a really important dichotomy. People maybe don't understand, but they argue about participation. And some are talking about participation,

like you said, from actually running a node or being a validator. But most people just want to use it as users and everyone can participate in that end and benefit from cheaper, faster transactions. So that's kind of the bad is, can we make the network so cheap and fast that it starts opening up new use cases? And those are still kind of unknown. Like it's not clear what those are yet. Like a lot of DeFi stuff doesn't need a super cheap network. Like automatic, you know, AMMs, constant function market makers, Uniswap does not need to do more transactions per day than it does already.

Like it functions fine. You know, Solana can handle something like Serum, which is a central limit order book, but that itself hasn't shown to be so much better than Uniswap that there's like, okay, we need to drop constant function market makers. Everyone move over to this. There's a lot of questions there, but I personally believe that like there's another 10X in reducing cost and performance improvement grows the space.

It's just like lots more people enter and build more shit. And we've seen that with NFTs. The number of people that started minting, like the long tail of artists in Solana is just much, much larger. And it's half a million NFTs a week get minted. And that's simply because it's cheaper. Yeah, well, there was a time I remember when NFTs a week get minted. And that's simply because it's cheaper. Yeah, well, there was a time, I remember when NFTs started to bubble, it was still cheap to mint on Ethereum. And then we had that kind of crazy gas wars period

where people were paying $200, $300 to mint something they were going to sell for $15. It just became unsustainable and actually crushed the artists. Exactly. So these technologies create really, really cool things. There was no concept of digital ownership before and making the network cheaper and more accessible means that more artists get to try and more creative things get to compete in the market and

creativity is the hardest thing to find. It's the most non-fungible thing out there. And like just that drives adoption and growth and everything. Yeah. So we've had sort of this emergence of multiple categories. I think it was all DeFi, right? Two years ago. And then, like you said, NFTs and the metaverse and all these things.

And now, of course, we have play to earn, I don't know, sleep to earn, walk to earn, breathe to earn. You can literally earn doing anything, right? Does one chain need to be able to accommodate all of these things? Or is that where we could see sort of a multi-chain spinoff where there's a specialization? You know, Solana becomes the NFT chain and Ethereum is the DeFi chain,

sort of as you alluded to, because AMMs happen to work there and so on and so forth. There's some engineering reasons why it might not be, that might not be like the best outcome. And that's because you have this one giant chunk of memory, like think of it as RAM that represents the state of the network. And when you split it, you're creating like like friction like effectively in defy it would be arbitrage if there's a uniswap market and one l2 and another l2 they're going to have slightly different prices now you have to rebalance these and rebalancing is going to take up resources right those are going to be transactions that are bidding and competing with

users and you end up with a system that might be really, really more expensive and less good at price discovery than one giant one. I'm obviously building Solana because I think it's the best design, but how this plays out has so many factors. Are any of these things the most important thing? but i think the one thing that is truly important is ordinary humans want the cheapest possible price to use these networks and the lower we make it the better and so far solana has its design despite its being expensive and the hardware translates into the cheapest possible like uh fees for users. No one has been able to even come close, despite Solana running for two years.

And you talked about the fact that AMMs actually, at this point, can effectively support the breadth of the DeFi market, right? But that also speaks to the fact that DeFi is kind of small, going through a winter, certainly, with all the exploits and hacks. I think that the shine is sort of worn off DeFi. But don't we need to not think about the current reality

and start to think about what it looks like at scale? If we believe that DeFi is going to be a parallel global financial system, that means that we need to accommodate a billion users a day, right? Is that even theoretically possible right now? It's about 50,000 TPS if they're all perfectly distributed. Billion users doing three transactions per day in a perfectly distributed manner would be about 50,000 TPS. Give you a sense

of scale, Google does about 80,000 searches per second. So that's honestly as fast as we need to make a single network to cover the world. Because I can't, you know, like in my mind, Google is kind of like one globally scaled thing, like truly globally scaled. It's one unit of that thing, right? And maybe there's going to be slightly more, slightly less, but I kind of think

that's how much we need to cover the population. And that's doable today with some shortcuts that will get easier as hardware gets cheaper. And the kind of shortcuts I'm talking about is like, if we like co-located and like put all the Solana validators on like a super, even more expensive network. And systems with multiple boxes for each validator with 512 cores or 1,000 cores, it could probably get there. And it's not even that expensive to do that. And you kind of think, why don't you guys just do that? Why don't you build this massive thing?

Because nobody needs it yet. We haven't seen human-driven activity to have such a demand on the network, despite the fees being basically lowest anywhere, that it's worth to deploy that hardware. We would effectively just be throwing money away. But I mean, does that mean that you don't necessarily believe that we get there? This becomes kind of a cute little thing that people who really understand it use? Or do you think that we get to the point where the UX and UI is so clean that grandma can use it? I think the hard part with crypto is that there's no shortcuts for the UX.

I think self-custody is a core thing, the same way that URLs and links are for the web. You still go to a browser, there's still a URL bar. Despite many attempts to get rid of it with AOL keywords and all this other stuff that people were like, the internet is too complicated, right? People don't understand what a link is. And all those things were true. People didn't get it. And it just took a long time for the human mind or like people that grew up native to it to really kind of become the dominant users and the same thing has to happen with crypto you can't get rid of signing you can't get rid of self-custody i suspect that 10 20 years from now you're going to have a billion people but they're

all going to still under like sign stuff and know what a wallet is and that they're connecting with their wallet to a decentralized application. And they'll kind of know the implications of signing and all those things at the same level that my parents understand what clicking on a link is. They kind of get it, but they don't know the details. But you need to kind of change that mental model. And I think that's the biggest bottleneck for growth, but it's slowly happening.

Like I think we estimate, and correct me if you think I'm wrong, that there's maybe about 10 million people that on all the chains combined that sign things on a monthly basis, like roughly about 10 million. Yeah, I would not be surprised if that was even high, to be quite frank.

You know, we throw out these numbers like 70 million, 100 million, 200 million people. That's all about how you calculate that. That's how many people have a wallet. And some of those are three wallets to the same person and they never transact. So yeah, you're talking about active people on all these networks.

I think it's very, very few. And most of them are just doing it to trade and speculate. So, but that number is going to hit 100 million people someday. And that's going to be, I think, transformative because at that scale, it's like when the internet hit 100 million people actually browsing, you saw Friendster, MySpace, and then Facebook pop up. And those were truly internet applications. They had no assets besides the social graph, which is kind of bizarre to think about it. Facebook doesn't have any real estate or stores

or logistics things. It's purely data. And I think you'll start at that scale with crypto, you'll see the same kind of things that are really, really hard to predict. I don't know if it's going to be an NFT set with a million people or an NFT set that becomes like the next, you know, Marvel, Hello Kitty or whatever brand, like something will have that breakout that you'll, that everyone will be like, oh yeah, it's obvious in retrospect.

Right. I mean, NBA Top Shot looked like that actually very briefly. I mean, look what that did for the entire NFT market when it sort of got hot. So if we have more of those coming down the pipeline, it would make a lot of sense to assume that we'll see, you know, sort of that mainstream adoption through these individual sort of projects or hype cycles. So I'm very bearish on things that try to hide self-custody. And like all the pitches that I hear that are like, this is too complicated for consumers. They won't even know

they're using a blockchain. It's almost a non-starter to me. I think you have to eat that bowl of shit, so to speak, in the UX and figure out how to make it work. That means that we really have more than an adoption problem. I think we have an education problem. And like you said,

that's not something that can really be expedited. It's going to take like for people to be comfortable with what you're describing and really understand it. It really is a 10, 20 year proposition. I think, as you said. Well, yeah, I hope we can speed it up. This is why like, you know, stuff like the phone is being built. It's like, I think kind as you said. Well, yeah, I hope we can speed it up. This is why stuff like the phone is being built. I think at a gut level, I think everybody understands that the hardware, that the computer you hold in your hand should be the hardware wallet for most of the day-to-day

applications. And there's a lot of UX that kind of sucks on mobile, despite mobile being the most dominant way people use the web or use anything in the world. And it's really kind of me, like I spent most of my career at Qualcomm. I was literally 10 years ago, they already had secure elements and trust zones and all this stuff. And we build freaking insane complex software to get copyrighted DRM video streaming to your device so nobody could copy it. Trusted displays that nobody could screenshot, things like that. All that stuff, very small part of it is necessary to make crypto secure and safe. And the stuff that we're doing with Saga is enabling that for end user.

And, you know, there's multiple ways we can win there. One is pretty simple. Google decides that this tech should be in Android by default and they ship it. And that might either promote the phone or kill it or whatever. It doesn't matter. But the industry moves forward. And that's like a huge win. Obviously, the other way is that like all the mobile execs just fall asleep at the wheel and we are right. And that becomes the dominant Android device. That's the other way.

In a perfect world, what does your experience with that phone look like? I think there's been a lot of confusion as to device itself and the other part is the stack. The Solana mobile stack is four tiny technologies. The seed vault uses a secure element to store your seed and the trusted execution environment to decode it and sign transactions, which means that it can take over the display and prevent anybody from spoofing that you're using a wallet. And these are kind of like the key parts. This is why the URL bar has this little lock and in your browser, it's because no other website can spoof that lock and tell you that you're talking over secure channel.

And for something complex like a wallet, you actually need to control the display. A bunch of UX improvements. Once you know that the phone has your this kind of like your your hardware hot wallet when you click on adapt and you click wallet connects and you see those 50 wallet options you don't need any of that the dapple already knows that there's a wallet right it automatically connects um so things like that would just be much much easier but when you go like shopping and you go to like an n payment, like buy your coffee at Whole Foods

or whatever, that can actually pop up a wallet like Phantom. And you can sign with that single fingerprint or face ID scan and just that experience could be delightful and awesome. And all those pieces are necessary because wallets are complicated. To build these UIs is complicated. And you've seen with the slope wallet hack, when you have a lot of complex code, an unintentional logging error could leak your secret. You basically need to remove the ability for wallets to steal user funds for wallets to be able to build

richer experiences, more complex interactions and things like that. So this is really like the hope is that we can give developers new tools to build awesome stuff. They go build it. And I'll do a victory lap when there's an app that is so compelling

that somebody is like, F this, I'm going to buy this stupid phone. I'm literally buying this phone because of this app. Right. I buy the iPhone because of the amazing camera. Yeah. I mean, we've all seen it, obviously.

And we know that that's how it will eventually probably take hold. The question I get then naturally is, how can you be sure that it's secure? It seems like there's almost, and you have to do it, you have to push forward. But it seems like you're almost increasing massively the risk of these hacks and exploits by putting that device, a universal phone, something that people do understand into everyone's hands. Well, people should still understand the difference between a hot wallet and a cold wallet. Your phone is your hot wallet. It's not your bank account.

It's just not your bank account, right. Go use a ledger or something equivalent like tinfoil paper wallet with an air gap computer or a Trezor or whatever. You need a cold wallet solution. But for a hot wallet, the security there is the same that you have for biometric scans for all the really important things that Apple and Google work on, Qualcomm works on. And there's definitely supply chain vectors and a whole bunch of other stuff. But there is a pretty large and robust industry around finding those and doing teardowns and making sure that there's no one that's sneaked in a hacked secure element or something like that. And that's a part of the development process. And I think the OEM that we're using. Awesome. Jason Keats was the lead architect of iPad pro he's built crazy

hardware, like James Cameron, submarine door. And like, what's the basically a first or second employee at essential, like built all their devices. He's like a hardware, like superstar. And like, I think we're in good hands, but obviously there'll be teardowns and all these other things and third-party reviews. That's really, really important. And I mean, just speaking of exploits and hacks, I know that it hasn't really increased as dramatically, I think, as it feels like. I think we're just under the spotlight and in the mainstream, so the hacks are somewhat bigger and more well-publicized. Do we get to a place where we don't even worry about that?

Where it's so secure that the bridges work and there's no wormholes? Or is it just we're going to always be chasing our tail on that? I think this is really, again, me as an engineer, my stomach churns thinking about the idea of building these things because it's so scary. The surface areas for attacks are really, really large. And it's people's money this time, right?

Yeah. Even it's bad enough when it's data, but we're literally seeing tens of millions, hundreds of millions of dollars drained. I think there's a kind of hard problem with smart contracts that you have a single instance of the smart contract that does the handling of money. It's just a single piece of code. So wormhole hack or whatever the latest one was,

the nomad or whatever, these are smart contract bugs. They were not like the bugs that Vitalik talks about when he says the multi-sig that runs a validator that'll collude to steal your funds. That's a possibility, right? And this is why bridging will always have some risk. But so far, all the bugs have been smart contract bugs. And those are really, really hard to make them like zero, to make it bulletproof. You basically need proof-carrying code and formal verification and a whole bunch of stuff that's just really, really undeveloped

in computer science. And these contracts get audited by four or five companies and still end up being exploited. So it's clearly like there's no direct science to knowing that it's secure until somebody tests it, I guess. There is formal verification. There is very high-level languages. You can describe the spec,

and the computer will tell you that if the spec is correct, then the code is correct. But those are not yet commercial. They're so hard to use that even me as an engineer, they're inscrutable. That's just, I think, Move, even though I'm shilling a competitor, I think Move is a really good attempt to try to bridge the gap there and actually add some stronger safety assumptions in a smart contract language. but it's still like so early. I mean, you refer to them as a competitor, but I think as you sort of alluded to earlier,

the space is so small that I think we're still in a place where you can cheer for your competitors and worry about it later, right? Because we need everybody to sort of all hands on deck, advance the ball, even if one chain is going to win. But that means that you could argue, at least right now, one of the most key elements being built is interoperability, right? And that comes back to all these bridges and stuff. And that seems really early. Yeah, absolutely. IBC is pretty well developed.

I think like the Cosmos folks did a pretty good job making that like such a core part of their ecosystem. That's what they are, right? That kind of approach to bridging is one that I think is pretty interesting because there's so many users of that bridge that the likelihood of bugs actually becomes lower because you have such a diverse number of use cases that are already using the same code. So I think that's like, if you're going to believe in that future,

that would be the way to do it. But we believe in a future where maybe one chain like Solana could dominate it and take everything and then we wouldn't need any interoperability at all. But paint a picture of that future. In 10 years, let's say Solana completely wins, right? Which means effectively that Ethereum becomes a pet project and all of these others sort of disappear. What does that look like for you? I mean, you're never going to sleep again, ever. I think what that means, it could mean that there's so many people using Solana that this is where 99% of transactions occur. But that doesn't mean that maybe Ethereum still has the highest TVL. What does that mean to win is unknown.

I think clearly the way Solana is designed and the way it's moving forward is to constantly reduce costs and to improve performance. It's more likely to drive adoption from a user perspective and maybe DeFi folks will always kind of tend towards Ethereum for whatever reason but I'm hoping that DeFi is you know we literally call the Solana blockchain an S speed. Because the fundamental design is this one chunk of state, chunk of memory that represents all the prices in the world synchronized at the speed of light. This is like my science fiction, like end goal for Solana is that when news travels around the world, state transitions travel at the same speed as news by the time that news hits like a Bloomberg terminal in New York the price whatever that thing was reflecting is already being propagated through Solana so when a trader

looks at a market at Nisei or Solana it's the same price that means that there's no like real arbitrage left um and that will require a lot of work we joke that if we have to do it we'll build neutrino based communication between nodes to cut through the center of the earth to uh to reduce latency but that that's like uh you know ways away um i think like the key part would that would be awesome and like a win is if we do see that like 100 million user breakout application happen on solana. And I don't know what that is, but like to me, if like the Facebook or whatever equivalent of NFTs gets built and it happens on Solana, that would be, I think how we win.

And like what that would mean. I don't know. I, I, I have this like belief and hope that self-custody is so important that if we have 100 million people in self-custody, that that becomes like a transformative force, almost like a global voting bloc around the world, right? Like, what if 10 million people decide to buy every coal plant and shut it down, right? Like the Constitution, Dal. The possibilities there are pretty endless and pretty wild. Yeah, I think the promise of DAOs is exciting, but I also have this sort of thought that

most of them will end up like Lord of the Flies. Absolutely. People get so excited about DAOs, but it's still just a bunch of people trying to agree on something. Never goes that well. I think either Lord of the Flies would be like one of the top, like most of them will just fail. Right. Like, and then some of them will be Lord

of the Flies and very political and stuff. But I think some of them will be pretty open and transparent and kind of like, you know, trying to do good. Yeah. So there's all these, obviously, we talked about categories that are sort of being built on every blockchain and just within the cryptosphere. Is there anything you're really excited about that's being built that people might have no idea about? and satellite and a whole bunch of like, kind of like this is going to be Discord or Twitter for crypto. There's a bunch of those. How the NFTs are slowly kind of, they're kind of sprouting. Some are trying to be brands. Some are trying to be like storytellers.

Some are like becoming more DeFi-ish. Some are just money grabs yeah yeah so i think there's there's something really really cool there um and gaming i think is the is the next one like things like biomes you i don't know if you ever played minecraft or something like that there's uh i'm a little old but yeah i'm a gamer so like the it's like open world where everything's an nft all the resources are but what's cool like about those things is that like where where i think stuff why i think stuff is interesting is if it somehow enables uh for like a new market for creativity and in this particular instance you look at minecraft people

build like 16-bit computers using the minecraft engine um but they can't do anything with them besides stream them on youtube and that's a kind of a a experience for the artist they basically make nearly nothing and just get like a bit more cloud but But with something like NFTs, you built this computer, you can actually issue it as an NFT and people get access to that environment through owning the NFT that really kind of naturally makes sense. So I'm hoping things that are like, I'm pretty bullish on people that figure out like, how do I build a platform that nurtures creativity, that like actually gets people to build and create. And that's very counter to this idea that you need supply constraints, that you need

to limit supply of something. And this is where I think stuff that focuses on limiting the supply is in the bucket of things that will probably fail. And things that can succeed where there's a limited amount of creation will drive like well those people that can build really good tools will figure out that creative people is the the most important constraint and that that i'm pretty excited about dare i ask if you're referring to bitcoin um honestly i like dude my family soviet union immigrants refugees from the soviet union had we had access to bitcoin our lives would have been like a lot easier and when we left like in 92

we were only allowed to take 50 dollars per person that's 350 350 bucks and 92 for seven people. So like, I'm, I like in my heart of hearts, I'm like a fan of this idea of decentralized money that is not controlled by superpowers. I think that's really, really important for people, most people outside of the US. Me as somebody living in the US, this is my home. I see that. Yeah, I'm good. The systems mostly work. There's a lot of bugs and a lot of problems and we all yell about it, but that's no different than a healthy engineering environment. That's true. You talked about this one killer app that brings adoption to 100 million people.

And you alluded to maybe we would have the Facebook of NFTs, but why not just the Facebook? We really haven't seen, I don't think the proliferation widely of decentralized social media. Is that viable or is it just not going to happen? Do you mean like Facebook itself transforming? No, not Facebook itself,

a competitive app that's built on a blockchain that allows people to own the content that they post and your data is not for sale to the highest bidder. Basically a better version of Twitter, Facebook, Instagram, TikTok that's actually decentralized and owned by the user. I think typically privacy is a secondary concern for consumers, unfortunately. Which is why they care. Which is why it's not going to be a driving force of adoption. I applaud everyone that's doing it,

but if you build a privacy- a privacy enhancing version of it you actually need to build something better than facebook on all the other fronts to be competitive with them and what that is is really hard to know but like it you know like those big companies get blindsided all the time like uh well i was at qualcomm we're trying to convince facebook to build a mobile app they didn't give a shit about mobile until Instagram and WhatsApp started eating their lunch. They didn't care about video until TikTok started eating their lunch, right? Like, stuff like this happens all the time. And because they're so big, they seefts as a blip um it's possible that like there are ways that nfts become

like a better form of content because creators get better rewards for that right they're not like constantly being skimmed and they all move over and then if that happens then there's crickets on all these other platforms right and then i'm hoping that if you're a builder in crypto, please build up privacy. Think about privacy. Because if you succeed, we want that version to succeed, not the version that took shortcuts there. You talk about Facebook, obviously. Their model is wait till something blows up and then just buy it or copy it and crush it. I remember when Vine was huge on Twitter. Just make stories on Instagram and completely crush it. But for once, not in the vision I think that we have, but Facebook seems to be trying to get ahead of the curve by rebranding as meta and talking about the metaverse.

What does a Facebook metaverse look like versus a decentralized metaverse on Solana? I think the metaverse is really, really hard to build because for any of these things, you need to have purpose. And being a 3D character, moving around in a 3D space just to talk to people. Yeah. It has no like, like it has no purpose. Like it's not a, like I would rather use a chat app because it's more efficient.

It's what I'm used to. Right. Or FaceTime. Right. I could actually look at you and we could talk. It's great. Right. We're doing it right now on Zoom,

right? We are in the metaverse. This is the metaverse. So like, uh, We are in the metaverse. This is the metaverse. So like, I think there's stuff like with games and gaming that obviously like, you know, Fortnite has like concerts and stuff that works. And that's because that game is a purpose.

You go play it and it's entertaining. And the, the game itself is what drives that kind of like the social networking glue but like a shitty game on a very large platform is not gonna be something interesting like so i think they're yeah i think they're too early like it was a good a good attempt like i think the metaverse and solana is uh is like kind of a hodgepodge, like a bunch of different small startups. Yeah, a bunch of different small startups build a bunch of different things.

And then they try to figure out or make it interoperable because underlying data structure, the chain itself is open and transparent and you can make it interoperable. And there's like, the reason to do so is because when you launch a new game, if you import more NFTs, more things that are core to gamers identity, you kind of create your own distribution channel. Like, hey, look, everyone with a PFP can import their PFP into my game.

And it's like a sticker on your ship or whatever, right? Like, yeah, Random different things, but like there's reason to be interoperable at least. Yeah. So you don't see a ready player one future where everybody's in one common metaverse and just opting out of their daily life to go hang out with the same people and the metaverse. I don't,

I don't, I think it's what you described. I think it's more individual games in the communities that people find that they love, and that's their metaverse. I love Star Atlas. You talked about putting stickers on ships. I think those guys are amazing, although it's far out. I think that's a metaverse

which doesn't have to be the metaverse. It just seems like a boring dystopia to have a single metaverse. It's just not going to happen. There's too many smart people that would want to compete with it. That to me says it's probably going to have a single metaverse it's just not gonna there's too many smart people that would want to compete with it and that to me says oh it's probably going to be a very kind of like like very natural like it is with games there's no dominant game that everyone plays or too many bad people that want to take advantage of it and exploit the people that are in there

right that's really dangerous that would just be one humongous centralized system. It would be basically a replication of what everybody's already railing about in the real world, probably. Yeah. We're all fat in our wheelchairs. I need to escape the real world right now to be back in it. So, I mean, I talked about earlier, obviously, I'm also a big fan of Stepin,

which is something that you guys work with, which is effectively you buy an NFT of shoes, you go out, you walk, and you earn. Are there other to earn things that are coming that we might not know about? Yeah, Metacrafters is pretty cool. It's a learned thing where you get a backpack and you try to like basically learn coding challenges and things like that.

There's some folks working on kind of things like Duolingo, like languages. Language. And like those models, I think, like could work effectively. I spend money on fitness. I buy bikes and stuff and whatever. I do that not because I do like the bike or the thing or the running shoes that are better, but that's part of the motivation why I go out and do those things is because now I have some skin in the game. Like, why did I spend all this money?

I have to ride this Peloton. my retirement sneakers, right? There needs to be like a disconnect from like for folks participate in and step in and like they should treat it purely as a motivator to working out. And the value that they're getting is the workout and having a free market and like having that ability to trade and participate in kind of the rush of it is part of the engagement to keep you working out. And that, I think, is a pretty good model. I think the models that fail are the ones that try to make it a store of value or an investment where it's not going to be your retirement sneaker, right? Yeah, you might be getting some coins back for doing it, but the main motivation should be it's exercising and that's a side bonus. That's right. You don't buy your running shoes because, well, unless they're maybe like rare Jordans, but you don't buy running shoes to go running and then sell them for more. Exactly. interesting way to look at it because I still think that most people who are crypto native have this number go up, flip it for more in the future. And that's probably something that we really need

to eliminate from the crypto space if these things are going to really succeed. Yeah. And I don't know if that's possible. I mean, that stuff still happens in like the real world. Like people get excited. Yeah. Yeah. Or we need a whole lot of people who are not crypto native who come in strictly for the reason that you said and never think about that. Yeah, exactly. They don't come in like as investors.

So, and as you scale, obviously you guys have had a few growing pains, right? I've had a few times when you're offline and things like that. How do you fix that and make sure that that never happens down the road? I can't imagine like you're using your phone and the blockchain goes down, right? So those things have to be solved before you go fully mainstream with these products.

Well, one is that the phone would still work. Yeah, obviously the phone would still work uh uh effectively like um shipping blockchain software like layer one is the is the closest thing to shipping hardware if there's something that's wrong you're and you already post tape out you have the chip you're kind of fucked and yeah so uh the release process is like um so when we have like a problem it and we have these challenges because Solana has more transactions per day from applications than all the other chains combined. Like it's over 30 million. I think the peak was 65 million.

And you look at Binance Smart Chain, which is about 10 times less than that, like about 3 million. And Ethereum is about 30 times less than that, like about 3 million. And Ethereum is about 30 times less than that, a million. So on its own, Solana's load is just much, much higher. And we have a problem. It impacts a lot of users and a lot of services like Serum. And it sucks because as an engineer, you have this next release, but it needs to be audited. It needs to be baked.

We have to verify. So you're already fixing it and people don't know that. And it's hard for us to make a promise that, look, this is fixed exactly in the next release because until you actually deploy it and check, you don't know if this is the best analysis you can do. It still won't tell you a 100% guarantee for performance issues. For bugs that here's a memory leak and we fix that thing, there's really, really fast turnaround. But for performance aggregation,

those are the really, really gnarly ones. So that's been really challenging and really hard on our engineering team. But 1.10 release has been awesome. I think you've seen people post that we got Solana Summer, but it was because we got Solana Summer, but it's been TPS instead of price or whatever, which is what I really worry a bit more about than anything else is performance. I think when people look through it, that lens. Think about how many times your iPhone has bug updates. It seems like it's once a week, any software application. But people have this sort of expectation that you

can never go down. So that's probably just a major challenge. That's right. It's the right expectation to have. And the biggest thing that is going to change about Solana in the future that really makes sure that these bugs are virtually impossible is that one of our partners jump is building a second client from the ground up. This is a second implementation, effectively clean room implementation. There's going to be a spec and everything. What that means is that it's extremely unlikely for two different teams building in two different languages from a spec itself to have the exact same bug, the exact same memory leak that runs a node out of memory and causes something like a halt like would be virtually impossible.

And if we have these two clients up and running, I think the network is going to be far more secure and far more reliable than it'll get to that next level. But obviously we're also doing a bunch of stuff internally. I think the biggest things that we needed to fix, and this was a design problem in how Solana was released, was the congestion model.

So why we even have these problems because when people have like an NFT launch, they price their NFT at a flat price so it's not a dynamic auction and if somebody thinks that that thing is worth more those folks have figured out to spam the network with like 100 gigabit worth of packets per second this is like 10 million proposed transactions per second and the block producer the leader has to filter all of these and find the ones that are actually valid. That means that virtually all of them get dropped. And that process

of filtering, if there's some bug in there, or like something takes too long, or there's a queue that fills up unbounded or something like that, that could effectively stall that validator to the point that it's a down node. And if you have a third of them that are down, the network will effectively halt. So a bunch of those bugs are fixed. And there's design differences now where we've implemented QUIC, which is a congestion-based protocol that actually prevents bots from sending that much traffic. And dynamic fee markets. And this is an innovation on solana from ethereum

is that we are able to price state like the actual bits of memory that represent a serum market versus a mango one versus an nft auction they're able to be priced individually so when you have like a spike of demand for any single thing and the fees go up for that nft sale that doesn't actually increase fees for all the other users so when that ape ape token was airdropped and fees went up to four thousand dollars in ethereum if that happened on solana only the fees for those users would go up and everything else would work and this is why i'm i I'm like my nerdy pitch for the one chain that wins it is that if you have a system that can handle multiple markets, like dynamically priced markets, there's actually no point to multiple shards of it because it's a single system that can now handle all the state in the exact same fair way. And it does allow people to still have this atomic single state machine. So there's

no engineering reason to split it and to add an L2 or to add multiple copies of this chain. So if we can make the system, the big question, can we make this thing really, really fast and effective and cheap for users and be able to manage all these dynamic auctions? We believe we can. And if we can, that's the engineering reason for why there could be one chain that wins it all.

What does it feel like when the chain goes down, though? Describe what that's like. The first time it happened. Is it like 7,000 phones and calls and telegram messages? I mean, it's got to be a horrible feeling. No one has heard the story,

but the first time it happened, actually, people don't even remember the first time it happened because this was when Solano was still in the super early days this was 2020 on my birthday sam calls me like at 6 a.m and i thought he was trolling me because it was like because i thought raj set him up to do that because it was my birthday. And when I realized, you know, I checked the Explorer, I was like, oh, fuck. The thing that happens is that the validators detect it. And the way that we built Solana is that we run a testnet, which runs our next release.

And we stress test it. And that thing crashes or used to crash very, very often. Now it almost never crashes. The validators on their own are forced to restart the tesla so we kind of we gave them the tools to do that so they've gone through this process a bunch of times and one of them decides to be like whatever the project manager for that restart they create a doc they go through all the steps and the validators go do it. Sometimes it takes a little longer. Sometimes it takes a little, you know, the last one took four hours. So it's getting faster and faster. At some point, you know, like Bitcoin had two hours between blocks when miners

moved from China. If Solana downtime restart is less than that, is it really down is the question. Well, yeah, yes. I mean, I mean, people never talk about it. You're not technically down if it's taking forever to confirm a block, but it's effectively the same thing. People don't really talk about that. The answer is that basically you're just waiting with everyone else because it's decentralized and the validators are dealing with it. Our engineering team tries to figure out what happened because that's important. Like, was there like an exploit in the code or hardware failure or something like that?

And so far, these have been like dumb, dumb bugs in the code that are hard to find. And like the most recently that are hard to find because the amount of load that's being generated by the attackers is so large that it's hard to simulate um so these things you know like sometimes people miss them in an audit sometimes they're very subtle and like really hard to really hard to find until you actually see it and like no test net will ever simulate a true production environment. But like a lot of the fixes that we've done, especially with Quick, will just kind of eliminate that whole class of problems. So I'm hoping that like with Quick and with a second client, basically Solana becomes also the chain that is like the one that never goes down.

I love it. Sam that called you. Like, no wonder the guy sleeps like one hour at a time in a beanbag. He's on TV simultaneously. Like, he must have replicas of himself. But that he is so involved that he's literally the one who noticed and called you.

Crazy. Yeah, well, a lot of people have noticed at that point. But yeah, it was the morning call. Absolutely, unbelievable. Well, man, good. I appreciate you taking the time to talk about this. It's interesting because most of the people have sort of said, listen, yeah, we'll probably be a multi-chain. We're on a little bit of everything and you're unabashedly say we could do it all. And I appreciate that. Yeah. Good luck making it happen. For sure. Thank you.

So before we go, where can people get their hands on the phone and check it out? Go to SolanaMobile.com or follow the Solana Mobile Twitter and pre-order the device. We're almost sold out of the, if you're a developer especially, we're getting really close to being sold out of the 3,500 developer devices that should be available for Breakpoint. So go pre-order and we'll prioritize you. And where can people follow you after this conversation? On Twitter. I'm

AEYakovenko on Twitter. Pretty easy to find. Awesome, man. Thank you once again for taking the time and good luck dominating the world. All right. Thank you.