Unchained - 2025 Will Be a Year of Crypto Competition. Can Ethereum Make a Comeback? - Ep. 760

Starting point is 00:00:00 I think that we're going to see proliferation of applications that are on-chain that offer the same user experience and utility that we have from existing centralized platforms. And I think it'll be the year that we shift away from the majority of activity happens inside of centralized platforms. The majority of crypto transactions happen on Binance, on Coinbase, et cetera. and we shift out into the majority of transactions happen on-chain in open on-chain platforms. I think there's also a very high chance that 2025 will be the start of the market shift toward a new bear market. I hope it will be later in this year, but I think there's a very high chance. We shift the market dynamic to something that is more flatter, down-term during the year of 2020. So it's going to be a great year, but probably at some point of the year, we're going to change the paradigm in terms of the actuality of the market.

Starting point is 00:01:10 Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today we have one from Lawrence Grigg on X, who responded to Shaw Walter's comments that universal basic income won't work, and that we need to build a technology to enable a non-governmental form of UBI, so people have time to do things that they really want to do. The examples he gave were things like focusing on family and pursuing creative passions. Lawrence wrote, quote, I'm of a different opinion. Once there's no need for money,

Starting point is 00:01:45 most people will be doing nothing and be complaining about it. Drug and alcohol abuse will reach epic levels. Humans are imperfect creatures that need the struggle of everyday life for meaning. To have your comment featured, write a review of the podcast overall on Apple Podcasts or Spotify, or leave a comment on the episode on YouTube or X. This is the January 7th, 2025 episode of Unchained. Did you know the Stellar blockchain already powers over 550 million tokenized assets in 180 countries? Join the Build BetterMovement at betteron.com.com.

Starting point is 00:02:20 Pocod is the original and leading layer zero blockchain with over 2,000-plus developers. and the Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem, making it faster, more secure, and adaptable. Perfect for GameFi and Defi to build, grow, and scale. Join the community at Pocodot.network slash ecosystem slash community. Robin Hood's Defi mobile app takes no fees on same chain and cross-chain swaps. Use Arbitrum's Layer 2 to swap with low network fees in just a few taps. Other fees may apply. Download on iOS or Android today. Did you know High Growth Vault,

Starting point is 00:03:02 aka High Gain by Kelp, offers over 20 plus percent reward rates on ETH by leveraging Blue Chip DefyPyce strategies. Maximize your rewards with professional risk management. Get some of the highest rewards on ETH. Visit www.keltow.xy-Z. Today's topic is what's in store for crypto in 2025. Plus, what's all this drama in Ethereum? of about. Here to discuss are Mark Zeller, founder of the AveyChayana Initiative, and Kane Warwick, founder of Infinex. Welcome, Mark and Kane. Thanks for happiness. Yeah, very glad to be invited. So, 2024 was a historic year in crypto, in my opinion. It seems the crypto industry really put the FTX collapse and fall out behind it. And finally entered on a path, I think it should have

Starting point is 00:03:49 been on for a while if it had not been irrationally politicized. But anyway, let's not talk about regulatory political things because we've covered that a lot. So aside from political achievements, what is your top takeaway for crypto from 2024? And Kane, why don't we start with you? Sure. I think probably the top takeaway for me is the white swan of the, you know, and again, not to focus on the politics of it, right? But like the kind of white swan of the entire crypto ecosystem almost uniting around this kind of political goal of defeating their enemies essentially, right? You know, we'd had two years of like very, very adversarial regulatory environment.

Starting point is 00:04:41 And finally, we had a sort of catalyst that I think was enough to get everyone in crypto to realize that there was an opportunity to, you know, really push hard and, you know, kind I take it to the polls and win. And I think that, you know, when you look at the result, you know, even down ballot, right, the result was very, very good. And so I think that that ability to coordinate, which we all know that crypto has, but we maybe hadn't shown it on like a global stage yet, you know, was our biggest achievement by far.

Starting point is 00:05:16 I think we can look deeper on that point in the sense that I think. I think 2024 was a turning point in the fact that when you do politics, and I know we don't have to, we go too much deeper on that topic, you cannot ignore crypto as an industry anymore. And I think a large part of these election at the end of 2024 was about that some part of the political spectrum has been extremely aggressive. toward crypto followed to previous year, with things like Operation Shortpoint 2.0, with part of the party that we're building anti-crypto army and this kind of stuff. And when you have a noticeable amount of the population that do have crypto as part of their portfolio, it's generally something that will cause a backlash to be against the industry. And I think people have took notes across the globe around that fact that you cannot ignore

Starting point is 00:06:30 or be completely outside the crypto industry anymore because it's not just a bunch of the agenda gambling in their own basement anymore, but it's an actual industry and you have to deal with it as one of the best part of finance. And I think it's a big win that it becomes something that is clear in 2024. And we are going forward in 2025 with these facts that crypto has to evolve with this new paradigm. Yeah, yeah. And it looks like, you know, some of the, I guess you could say, optimism or, yeah, just the change in outlook, I think, has really supercharged the market. but then also I feel like it has caused the brakes to be released on a lot of innovation.

Starting point is 00:07:26 So let's actually now talk about a huge exciting trend that took off near the end of the year. We saw Truth Terminal kind of be the initial AI agent that really caught people's imagination. And then as the year closed out, AI16Z, AIXVT, other AI agents were taking off. Also, there's now these platforms to create AI agents. And so as you're watching all this play out, what are your thoughts and where do you think this AI agent trend will go in 2025? My vision of the topic is that like every new industry, there's 99% bullshit and 1% innovation. And I think it's even more highlight is this new vector of the industry. 99% of what we see up there is basically chat GPT worker of locality that will pre-compile like a Twitter.

Starting point is 00:08:19 feed and allow opinion leaders to have more impact and generate more engagement of there. But that would be a lazy analysis to stop there, in my opinion. I think we are assisting to a paradigm shift in all we organize the public discourse using AI to supercharge this interaction. we are seeing as well the integration of more and more AI agents doing things on chain and that's very exciting to me but also very frightening to me because risk is a lot of risk management is a lot of things that I do take today operating and participating to a disauthorized autonomous organization that has so much money in it and there's a lot of innovation to go there

Starting point is 00:09:12 and to say my opinion just to finish on this is I think it's a lot of value-adethive to the ecosystem that, for example, just low-quality NFTs or min-coins. At least we are building something and that's really innovation, so that's quite interesting to you. And wait, just to understand, you feel like the AI agents could increase risk in a system like AVE? Is that what you're saying?

Starting point is 00:09:39 Or how so? I would not delegate the risk parameter of the AVE protocol to AI agents without any superiors. because if you try to do that, you will probably break a few X. You wouldn't, but someone will. Someone will. Someone will. And put an AI agent in charge of it.

Starting point is 00:09:57 AI, AI Mark Seller is coming for sure. I mean, we have multiple instances. So we can do an AI operator in the instant of Avey, but I will not cut my own money on it. Do you mean a list? And but like the way that you initially phrased it, I thought you were saying that you felt like the presence of, AI agents transacting on chain would somehow change the way you value, or the way that you assess risk in the system? Or is that not what you were saying? I think it's interesting when you do risk management analysis. Obviously, that's not my direct job because that's RBI lead growth

Starting point is 00:10:35 and governance coordination. And we have two very incredible risk teams at RV working on this. That's KAUS, Lab and Lama Risk. And when they do quality, and quantitative analysis of the market, the reaction of the market agents are extremely important. And I think there's still, in 2025, and it's an order of magnitude better that what we add in the D5-7-2020-2020 till 2020 is there's still a lot of inefficiency in the markets,

Starting point is 00:11:11 arbitrage, carry trade that have not been, have not taken, because there's a lot of things that are still manually in our market. And if you have more and more automated agents that inentifies those arbitrage and those on-chain opportunities and tech them, you will have less volatility on the market, especially in our core business, which is like the interest rate curves. And why do you pay, for example, 14% to borrow USDC on arbitraram and maybe only 9% on base?

Starting point is 00:11:41 That's when all things equal. all things never equal, but there's a lot of inefficiency like that in the market. And I think more automation will reduce those inefficiency. And that's quite interesting when you look at the market as a war. Okay. So actually, it seems like then it does decrease risk? Well, it depends. I feel like it's short term, right?

Starting point is 00:12:08 Like short term, you have a whole bunch of models that make assumptions about the actors an agents in a system. And if you replace the manual agents, i.e. people, and the bots, the automated agents, with a different type of automated agent that's now powered by like a different type of logic that could go wrong in different ways, your models will be out of date for a while, right? So like, I think that's where like it could potentially introduce more risk. But, you know, LLMs, I would imagine will act just like automated bots, but maybe with slightly more sophistication. I think the interesting story for me, though, is like, what I love about crypto is lowering barriers to entry.

Starting point is 00:12:52 Right. So back in the day, it used to be hard to launch a token. You used to have to be kind of a bit technically sophisticated, right? And then we got better and better tools. And it finally, like, sort of culminated in pump fun, which was like the easiest, simplest way to launch a token, right? Like, and, you know, even Solana, when I first did my Salana meme coin back in late 2023, it was not easy.

Starting point is 00:13:17 Like, it took me a little while. It took me, like, a week to, like, work out how to launch a token. And then, like, six months later, it was like, you just click a button. It's done. So lowering barriers to entry, I think, is kind of the interesting thing about this. And I think that what the AI agents do is lower barriers to entry of not just launching a token, but then following it up with, like, content, right, and getting attention. And like, attention is the game, right? And so not only can you launch a token, but you can actually generate attention for the token without even doing anything. You just click a button and it's kind of done. So, you know, we went from like the, you know, truth terminal, whether you believe it's a human typing it or an LLM doesn't really matter to like now virtuals is like pump fun for AI agents. You just click a button and now, you know, so it's it's pretty crazy.

Starting point is 00:14:09 when we think about how fast these barriers are falling. I guess the more interesting thing to me from a market dynamic, though, is like when you lower barriers to entry, the opportunity changes, right? So like the differentiation point shifts to something else, which is still hard. And I think that right now, launching an AI agent is super easy. Launching a token is super easy. Finding ways to differentiate it, it's still hard. That's the still the challenging thing that LLMs haven't solved yet.

Starting point is 00:14:42 But, you know, they might solve it next week and then we'll be on to something else. Yeah. Well, one other thought that I was having looking at this AI agent trend was that to me, it looks like even more disruption is coming for venture capital because, yeah, it's just like you were saying that you could just launch something. But, you know, I have seen people talking about this. on Twitter and some people are saying, oh, but you know, VCs allow you to have that differentiator because they're sort of like creating signal out of the noise.

Starting point is 00:15:18 So I wondered, you know, if you thought that AI agents were going to have some impact on VC in either a negative or positive way. I mean, I think you could replace Kyle Simani with an LLM pretty quickly, right? We're almost there. The technology is almost ready. So, you know, we're not that far off. Wait, wait, wait, wait, do you just mean his presence on X or do you mean? Yeah, his presence on X, which is like most of the thing, right?

Starting point is 00:15:46 Like, you know, it's an attention game, right? It's about curating deal flow and, you know, getting into the best deals. So once you've got attention, like it's not hard to see an AI agent on X getting a bunch of attention and therefore getting deal flow. And once it gets deal flow, deal flow, but gets deal flow. Like, you could see an AI agent that could be a very good VC. It could be terminally online in a way that, like, you know, myself and Kyle and Mark could never possibly manage, right? Right.

Starting point is 00:16:18 But it wouldn't be able to develop human relationships that, you know, like, I don't know exactly. That might be a feature. I don't know. That might be a feature. It's not going to be, it's just going to be getting attention on X all the time. I think if you add a layer on top of that, to imagine an agent running an eco-group or Latium accounts. And like to me, as a founder and as a member of these interest before the past 10 years, I see less and less added value to have an EVC in our ecosystem because we reach a point where the market is mature enough to have actual users.

Starting point is 00:16:58 actual, it's not betting on the infrastructure that might work in three to five years. We are an industry that has application that makes money today. And the reality is that as a founder, I don't need any funding for the ACI because I'm lucky enough to not need it. But if I need it to raise, I will go to AECO and raise to 200, 250, Defi OG and actual users. And instead of adding one BC, I will have my... 200 first power user that will bring my first 20 to 50 million TBL in my protocol, and I will go from there.

Starting point is 00:17:36 And I don't see any reason why I should take any money from Paradig, A16, Z, all guys, because it doesn't make sense to me. And if my group leader is an AI that will treat about me 20 times a day, and I have 200 crazy defy OGs that actually use my protocol, all can A16Z complete with that. I mean, the ideal, the ideal there is that the AI agent running the ECHO group has only other AI agents in the group. And they're actually tweeting 10 times a day. You don't need people at all, right?

Starting point is 00:18:10 You just have AI agents that's curating the agents. Well, it's so funny, yeah, because my next question was going to be about the fact that there are now these, you know, platforms like Echo, Legion, Biddlepad is another one. And we saw Mega-Eath, you know, that first offering on Echo. just sold out in less than a minute. It was oversubscribed. You know, Hyperliquid obviously was a huge successful launch in the fall. No funding from VCs. So I just wondered, like generally in 2025, do you feel like we're going to see some renaissance in kind of, you know, something more like a typical ICO crowdfunded model? Just, you know, obviously improved from 2017.

Starting point is 00:18:54 I think it makes sense because ICO where, you know, the right pass, I think it should make sense to raise on-chain when you are an end-chain application. The issue with ICU back then, it was the lack of actual use case in the ecosystem, because back in 2017, during the ICO era, you were raising based on the PDF. And even today, most of the time, you send a PDF attack to some VC and you hope that something would happen. Yeah, the white paper. Yeah, the white paper.

Starting point is 00:19:31 But right now, you don't raise on a three to five years, something that will happen to do in three to five years. You raise about something that probably already has an MVP on there. You have some smart control around. You have some TVL that already is going into your ecosystem. It doesn't exist, like raising from scratch. Just based on an ID doesn't exist anymore in our ecosystem, on the application side of things.

Starting point is 00:19:58 Obviously, there's still a infrastructure and long care project in the ecosystem, but I'm talking the application side of things. And in that case, I don't see any added value anymore on VCs in our ecosystem. Interesting. I think like the echo, the reason why I like Echo over a straight ICO, right, is it's an evolution of the incentive mechanism, right? Like the mechanism design is actually better. So there are, you know, there were always people curating deals, even in the ICO era, right? You had, you know, the crypto lark and, you know, Ian Bolina and people like that that were curating ICOs, right? But the incentives were all wrong because they were basically paid to shill these ICOs and pump them up.

Starting point is 00:20:48 And, you know, it just was a race to the bottom, right? with Echo the way that group leads are set up, the incentives are much more aligned, right? And as a group lead, you want to curate better deals because you want to have the best group and you'll only keep the best group if, you know, you keep providing good deals. And so there's a very powerful feedback loop there where, like, the best groups, get the best deals, have the best group members, you know, to Mark's point, you want the first 250 users who are going to give you your first 50 mil of TBL, that only works if you have good users in the group and you're bringing good deals. And that means you have to work hard. You have to be aligned.

Starting point is 00:21:28 You have to put your own money into the deal to make sure there's skin in the game. There's a whole bunch of incentive structures there to ensure that there's alignment and positive feedback loops. Of course, you know, there's edges to that, right? And there's people that are, you know, running groups where they're putting in very small checks, $100 or something like that and then, you know, trying to farm as many deals as possible, but those groups, I think, will fall apart very quickly. So, you know, versus pure ICOs, I think Echo is a better model. Obviously, there's a trade-off. There's KYC. It's a closed system. It's on open permission on the system. But I do think it is a significant improvement over some of the issues that you saw in ICOs.

Starting point is 00:22:11 Yeah, I feel like what we've seen over and over again in crypto is that, you know, there was this promise that the incentives help. align the users and the founders and blah, blah, blah. And instead, what we've seen is this kind of mercenary model where people yield farm, they get the air drop, then they move on. And, you know, and it's just creating this like roving mass of people who are just using you for the money and then dumping your project. So maybe this would be, you know, a time when that shifts and people kind of stay in it for the long term. I did want to ask though, you know, while we are talking about VCs sort of getting cut out, you know, the meme coin trend,

Starting point is 00:22:48 was another example of that. And I wondered, you know, where you thought that trend was going to go. Obviously, Pump Tet Fund had this incredibly successful year was, you know, bringing in a ton of money. But, you know, do you feel like they can sustain this success and meme coins generally can sustain this momentum? We always add in the financial history some demand for speculation based on no fundamentals. Like, it's not something new. It's not something that happened in crypto. like high volatility is attractive to some investors. And when you have zero fundamental, you have no limit to the volatility. So I think you have to stay as a part of the industry.

Starting point is 00:23:33 But if you look, I think what is interesting when you look at an industry is to take a step back and see the evolution of things. And 99% of the industry Bitcoin includes in the 15 years ago, 15 years ago, we only had Bitcoin, but everything was a meme because the technology was just starting and the use case were almost zero. But as we move forward in time, we have more and more actual fundamentals. We have more and more actual users, actual use case, actual real on-shane economic activity that happens. When you look at a sky, they actually make money running their protocol and they make a lot of it. When we look at all these protocols, they are actually reaching the critical mass of an industry that

Starting point is 00:24:25 has sustenance and substance. And I think over time, the part and the percentage of no fundamental investing will change towards the actual real economic part of our industry. So meme comments are here to stay, but I don't think it will grow in terms of market share in our industry. One of my favorite comments on this is from Matt Levine, who has gone through this very interesting arc, right? Of like, you know, from the early days of game stock being like, if this is still going on in 20 weeks, I'm going to be worried, right? And then, you know, like 200 weeks later, it's still happening. he got to the point, I think, a few months ago, where he was like, maybe this idea of fundamentals was itself a meme that's kind of run its course, right? Like, you know, from like the 20s,

Starting point is 00:25:29 basically this introduction of like fundamental analysis and discounted cash flows and all of these, you know, ways of like assessing a business. Prior to that, it was just like number go up, volatility, you know, bucket shops, whatever. And we've sort of returned to like the natural state of the world on some level, right? So, you know, it's a number. a very nihilistic take on the evolution of finance that like this this period in like the you know 20th century was was a blip where we all you know convinced ourselves that you could work out what something was worth and really it was just worth whatever someone's willing to pay I would say I'm not a not nihilistic then I actually feel like it's really um just

Starting point is 00:26:16 I feel like our whole society is becoming more gamified. And, you know, Robin Hood was the first financial app to tap into that. But I actually feel like in that way, it almost like shaped a new generation of investors or something. And, you know, it just sort of like changed, you know, as millennials just keep getting older and becoming more of the market. I feel like we're just going to see more and more of that behavior. And so I agree, like the sort of meme of fundamentals is like going to. out the window, you know, and this new person who's kind of grown up in a new era. And, you know, I mean, it's very similar to what happened with Silicon Valley Bank, where

Starting point is 00:26:56 that notion of a bank run that you could just do while you're like, you know, sitting in a on your app, you know, in a cafe. You don't even need to go line up. Yeah, exactly. Exactly. Yeah. It's just something that, yeah, is more of a generational shift. All right.

Starting point is 00:27:11 So it took us a bit longer to get to what to my mind was the one of the biggest, of the year. But as we know, Solana had a huge year and it bested Ethereum on multiple metrics, including obviously price. But, you know, meme coins, you know, as we mentioned, was one of the biggest trends in that Solana was the home to that. It also actually attracted more new developers to crypto than Ethereum. You know, it looks like it's becoming a home base for the AI agent trend. AI16 is using it. People are saying that DPN is going to emerge. merge in a bigger way. And that's, you know, really more of a Salana thing. And I wonder, you know, where do you think things are going when it comes to this sort of like rivalry between Solana and

Starting point is 00:27:59 Ethereum? Do you feel like it's just going to keep, you know, eating Ethereum's lunch when it comes to these more cutting-edge crypto trends? You know, there's a lot of kind of takes on the two theses of the two chains, the modular thesis versus the monolithic or integrated architecture of Solana. And yeah, I wondered if you thought they're just going to become differentiated or if it's really that Salinas is going to continue to steal Ethereum's thunder. That's a very interesting conversation, because I think the industry is evolving to have multiple areas where it can shine.

Starting point is 00:28:45 And it will happen and express in different chains. Because everything you say is true and is very valuable by facts. But also from my point of view, and on the defy and especially lending markets, Solana is not taking significant market share of all businesses. And I'm a businessman. I'm not a cultist. I'm here to make the AVE DAO rich. That's why I wake up every morning and I work every day and build some AAP

Starting point is 00:29:16 because I want to increase the AVEDAO button line because I'm paid for that. So if Solana was a profitable endeavor for the AVE protocol, I will publish tomorrow on even today on the Avedao forum, okay, let's deploy there. That did not happen yet. And I insist on the yet because it might change in the future. And I'm open-minded to change that in the future. at the future, if the actual numbers support the fact that it's profitable for us to go there. But if you look at the defy and Solana, the main market is called Camino, the borough rates on

Starting point is 00:29:52 stable terms are actually quite bad because most of the people will do like some leverage taking over there we saw or will do some meme coin trading of this kind of stuff. But you don't see happening there the actual core business that generate money on the defy landscape, which is use asset as collateral to both stable coins to do directional trading or to not sell your collateral assets and just use the cash to do something else. And that part of the activity is not gaining any significant market share over the Ethereum landscape. It's even regressing. If you look at the growth of the DFI ecosystem, Ethereum is winning big in terms of growth compared to Solana on the specific aspect of the industry. But you can say that,

Starting point is 00:30:38 And at the same time, recognize that on other part of the industry, they are outperforming largely the Ethereum ecosystem. Kane, what are your thoughts? I've also got a lot of thoughts on this. I think, like, there has been a pattern over the years, right, where a new network emerges, you know, especially when it comes to smart contracts, right? you know, Ethereum emerged out of the alt coins as a solution to building things, right? You couldn't really build things on anything else. There was like Omni and, you know, a few proto-smart contract chains, but nothing was really working. And Ethereum turned up and did the thing.

Starting point is 00:31:22 And then Solana came along and, you know, did it in a different way with a different set of trade-offs. And there were a lot of people that were like, oh, it can't work or it won't work, including myself, right? This is not sustainable. It's, again, the wrong set of tradeoffs. But it did work because people don't all care about ideological alignment, right? There's a lot of people who just want the best, fastest thing. And particularly in the case of Ethereum, as it got more expensive, Salonan became more and more interesting. Same thing with Avalanche, same thing with BSC and other chains.

Starting point is 00:32:00 I think what's going to be really interesting is when this next generation of FOSS blockchains comes out that is going to challenge Solana by maybe being more centralized, making more aggressive tradeoffs, right? And it's going to be really interesting to see whether those chains can get traction because Solana has been the fast cheap chain where all the activity has been happening for a long time now. And they managed to go through a bare market, which is the key thing that you need to survive as a project in crypto. If you haven't been through a bare market, you're not real. And now they've been through that. They've been through, you know, the fire and they've been tested and they've come out on the other side. But they're going to have a lot of fast followers that are going, how about, you know, four sequencers instead of, you know, 400 or whatever, right? And that's going to be challenging because they're going to be cheaper and foster.

Starting point is 00:32:57 And there's a bunch of chains that are coming out that are making, again, different tradeoffs, more aggressive tradeoffs. There's Monad, there's Fogo, there's Mega-Eath, there's a bunch, right? And so I think that that competition is going to be quite interesting. And it'll be really funny for me to watch if the competition actually pushes Ethereum and Solana closer together because now it's like the enemy of my enemy is my friend. if these other chains that are coming out trying to, you know, take them both on. Now it's like actually maybe we're more friendly than we thought. We've got more in common than we thought.

Starting point is 00:33:33 So I think that this year we'll start to see that play out. Interesting. I have a slightly different theory, which is something that amused me this past year was watching how both the Bitcoiners and the Salon of people seemed to bond. And in that case, it was definitely more like the enemy of my enemy is my friend. And I was like, oh, this is fascinating that they're both shitting on Ethereum, especially because the Bitcoiners are all about decentralization. And Solana is actually more centralized than Ethereum. So anyway, it was just amusing. But in a moment, so we're going to talk a little bit more about this centralization versus decentralization aspect. But first, a quick word from the sponsors to make this show possible.

Starting point is 00:34:19 The Stellar Development Foundation has launched Build Better. an initiative inviting bold ideas from the Web3 community. No coding or technical experience is needed. Share your vision for better finance, creativity, or access, and see it brought to life in Stellar's next hackathon. Developers will build real-world solutions on Stellar's fast, scalable, and sustainable blockchain. Submit your idea for a chance to win from a $30,000 prize pool.

Starting point is 00:34:47 Get involved at betteron.steller.org. The future of Web3 starts with you. Pocodot is the original and largest layer zero blockchain with over 2000 plus developers, and the anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem, upgrading the infrastructure with eight times higher transaction throughput and twice as fast block times, perfectly tailored core time for the needs of every protocol, trustless bridges internally and into Ethereum, Cosmos, near, Binance smart chain, and revised tokenomics and the implementation of a token burn to reduce inflation.

Starting point is 00:35:22 Perfect for GameFi and Defy to build, grow, and scale with one of the most active crypto communities in this space. Pocodot recently announced a partnership with mythical games, bringing top games like NFT rivals with over 650,000 players and 43 million transactions to pave the way for GameFi and the Pocod ecosystem. Get your Web3 ideas to market fast with economics that work for you. Think big, builds bigger with Pocod. Join the community at Pocodot. ecosystem slash community.

Starting point is 00:35:54 Big news for DeFi traders. Robin Hood Wallet, Robin Hood's non-custodial wallet mobile app, has partnered with Arbitrum to make access to L2 swaps easier than ever. Enjoy gasless swaps and cross-chain swaps on Arbitrum and other networks. The best part, Robin Hood Wallet takes no fees on same chain or cross-chain swaps. Other fees may still apply. With gasless swaps, you can pay network fees with the same token you're swapping instead of ETH. Cross-chain swabs make it incredibly simple to swap crypto without any manual bridging.

Starting point is 00:36:27 Download the Robin Hood Wallet mobile app today on iOS or Android and join people in over 140 countries, exploring Web3 with Arbitrum. Get some of the highest rewards on ETH with the high-growth vault by kelp. High gain leverages Blue Chip Defi strategies with RS-Eth across Ave, Pendle, usual, and elixir, managed by strategy experts, ultra-yield, and upshift. to get you 20 plus percent APR on ETH, all in a single click. Deposit your assets and receive HGEath, a reward-bearing token that represents your vault position, while keeping you liquid in defy. Trade or use HGEath on platforms like Pendle, Balancer, and more, while still ranking in yields. It's time to get high on rewards with high gain.

Starting point is 00:37:13 Deposit now at www. kelpdow.xyZ. We are now featuring quotes from listeners on the show. here's another comment on the Shaw episode from his remarks that AI agents could be used to find true trading signal amongst the noise of comments from crypto trading chats. Sergei Golubev responded, quote, this is a much-needed conversation in the crypto space. For too long, traders have been swayed by KOLs and FOMO mentality, rather than focusing on evidence-based decision-making.

Starting point is 00:37:44 To have your comment featured, write a review of the podcast overall on Apple Podcasts or Spotify, or leave a comment on the episode on YouTube X. Back to my conversation with Mark and Kane. So one other bit that I wanted to pick up on in terms of your comments, Kane, was when you talked about, you know, the tradeoffs around centralization and how, you know, Solana has made certain choices and some of the newcomers might choose to do things in a more even centralized way. But I don't know if you saw this over the break.

Starting point is 00:38:16 So Lily Liu, the president of the Solana Foundation, came on the show. And she basically said that she didn't think base could compete with Solana in the long term. And she was calling it a corporate L2 saying that it wasn't only parasitic to Eith, but that it was cannibalistic. And she was mocking people who had criticized Solana for not being decentralized because they were now then supporting base, which is, as she was saying, like, less, you know, even less decentralized in, you know, this corporate L2. So, you know, do you feel like Ethereum people that support base are being hypocritical, or do you just see them as like, you know, as those aspects of decentralization or centralization

Starting point is 00:39:04 on either of those changes being two different animals? I think it they're very different things, although it's a good talking point. So, you know, points to Lily for using it. I mean, the other thing that I was thinking before is if it weren't for base, Ethereum would be in a very dark place right now. Like, you know, base is really where a lot of the novel activity is happening, right? To Mark's point, you know, DFI is still happening on L1. It's where all the TVL is, Athena, things like that. It's all happening on L1.

Starting point is 00:39:38 But when you look at like the crazy attention grabbing things, it's really happening on base. Yeah, but I do have to say, to my mind, a lot of it is teaching stuff that's happening on Salana and importing it over to Bays, right? Yeah, I mean, hey, it's a good playbook. It worked for Salana, right? Like, why not? Why not, you know. And this is the interesting thing, right? Is like the base, the people who are driving base, Jesse, right, are so much more of pragmatic realists than the people who are driving a theory. right? You know, the people who are driving Ethereum are much more idealistic, right? Much more research-focused, you know, decentralization, purity, etc. Base is like a growth team. You know, that's their job, right? It's just growth and they're just focused on growth. I think the main difference came, and I think it explained a lot of it, is Ethereum Foundation is operating as a non-profit.

Starting point is 00:40:43 The research-oriented nonprofit, Coinbase is a fucking company, and I think it changed everything. Agreed. Agreed. Well, so this actually leads pretty much directly to my next question, which is just I feel like Ethereum is going through sort of a protracted, shall we call it, puberty or awkward phase.

Starting point is 00:41:08 They obviously had a rough year. And, well, actually, I should qualify that. So the price obviously did go up quite a bit. It went up about two-thirds. But, you know, both Bitcoin and Saul more than doubled. So I think that was, you know, causing some of the angst in the Ethereum community. But there were just so many negative narratives, like, you know, this question of whether L2s are parasitic to ETH or as LLITO's called them cannibalistic. The ETHs had so little inflows compared to the Bitcoin.

Starting point is 00:41:40 ones. Obviously, the reaction to Justin Drake's roadmap, the five-year roadmap, was pretty negative. People really, like, crypto moves so fast. It makes sense to me that people were shocked that this roadmap was that drawn out. There were other people who had ideas of things that could be done right away. You know, Martin Koblman had that idea for the native roll-ups, which would be a lot easier to implement. And then, you know, just in the last several days, there's been this drama over the week in Ethereum newsletter, which I don't think anybody saw that that would set off just this huge round of hand-wringing yet again. But, you know, basically when I watched all of this playing out, I'm wondering, yeah, like, where is Ethereum going? You know, do you guys still have faith in this modular thesis? And do you have faith that it can accomplish what it needs to accomplish

Starting point is 00:42:40 in the time that it needs to accomplish it as all these competitors are not only coming online, but then, you know, Salana is already like taking market share and various aspects of crypto from Ethereum. You know, where do you think Ethereum's headed? It's a deep topic to give a short answer to a deep topic. So it's always with some flows. If you look at Ethereum and you look at the actual economic activity metrics,

Starting point is 00:43:05 still winning. in terms of liquidity up there, especially the layer one. And one thing that is very important for me as a businessman is, do people are ready to pay to use your service? And I think that's a good sign of health and a good proxy to see if you build a product that people actually want to use. And the reality is that people are still ready to pay transaction fees to use the Ethereum Lay 1 and still ready to make activity on layer 2s

Starting point is 00:43:34 when they want to optimize those transactions. each area vision was to create a multipolar model with a bench of layer 2s, that's the world-centric approach, and do the skyline pete through layer 2s, and the Ethereum ecosystem offer a large diversity of layer 2's ecosystem that are all thriving in their own way. But maybe not all thriving, but the ones that have success are thriving in their own way. So if you don't like the fate chain, the copper chain, all the centralized chain, that's a base represent for some people. I do not agree 100% with the division. Just go to arbitram.

Starting point is 00:44:14 And if you don't like arbitrium and the Tao decision or arbitrarian that might seem a bit arbitrary to you, you can go to Polygon. And if you don't like Polygon, you can go to another one and another one and another one. And the good things that we have created on the Ethereum ecosystem is that your experience, It will be almost similar on all this thing. You will have different level of liquidity. You will not have 100% of the apps you have on the layer ones. But if you want to trade on Uniswap, you can probably do that in 25 different that you choose right now on the Ethereum ecosystem.

Starting point is 00:44:50 And your experience will not be that bad. And so there's been some success on that part. And at the same time, there's been stuff that. are lacking, especially when Laura, you talk about layout being incrediblyistic with layer one. The reality is that most of the activity that is creating on the layer two do not profit on the layer one in terms of the bottleneck because of the way the blobs economic work, you will need 100 times or 1,000 times more activity on the EU2 to make a dent on the actual fee space of the layer 1.

Starting point is 00:45:31 but if you look at the industry as a world and the market as a wall, do we really believe that people using the layer one, stop using that and migrated to layer two, and it's only a decrease of the economic activity of the year one, or do we believe that layer two in general bring a new user base that we're not in the Ethereum ecosystem at the beginning? And I think both are true, but if you look at the actual numbers

Starting point is 00:46:02 and if you look at the TVL growth and the actual economic growth of the layer one, I'm on the side of believing that the whole layer two ecosystem is value additive to the Ethereum ecosystem instead of value abstractive.

Starting point is 00:46:19 I think the problem is the tokens, though, right? You know, the fact that every layer two, except for base, has its own token. If it, you know, if base had a token, it would probably be net negative for Ethereum, I would say, right? You know, right now it's net positive, but it would probably flip it, because it would fragment

Starting point is 00:46:39 the ecosystem even further. And the issue with crypto assets is they're highly reflexive. And so each marginal dollar that you pull out of an asset like Ethereum has a outsized effect on the margins, right? And so, you know, when people come into the ecosystem and they're like, do I buy arbitram or, you know, and we had a little bit of this problem in Defy summer. It's like, do I buy land or Haven or, you know, Maker or whatever? You know, but it was not to the same extent. The DeFi protocols at their peak were like, you know, 5% or something like that of the ETH market cap. It was very small.

Starting point is 00:47:21 So, you know, I think now the total market capital of all of the, the L2s is like 20% of Ethereum, at least the last time I checked a while ago when the ether price was a bit lower. It might be better now. But it's a meaningful percentage of the ETH market cap. And I think that that just sucks air out of the ETH asset and creates like choice paralysis for a user who likes the Ethereum ecosystem. They don't really know which one to choose.

Starting point is 00:47:54 Do I spray and pray, et cetera? Whereas in Salana, it's like if you were a salana person, buy Sol. Like, they all know to buy Sol. It's not confusing. There's no, you know, you might buy some other stuff. You might buy meme points. But like everything's also Sol denominated, which is another thing that people forget about. You know, in the ICO era, everything was denominated in ETH.

Starting point is 00:48:13 We didn't have stable coins. There were no stable coins around. We had USDT and it was on Omni. It wasn't on Ethereum, right? If you wanted to buy an ICO, you had to use Eath. And if you want to buy a meme coin, you have to use SEL. So that's a huge, huge difference in terms of like soaking up, you know, salt for people who want dry powder to buy meme coins. They have to hold some salt.

Starting point is 00:48:36 And so I think there's a lot of different dynamics that are impacting Ethereum price action. I'm not sure I completely agree with you on this, but if you want to be based mystic on that chain of tauts, what do you think of unichie? Because uniswap is probably like accounting for 20 to 25% of the gas paid on Ethereum. at some point. Obviously, when the activity is larger, it's more diverse in terms of sales. And those guys, they just said, well, we're going to do our own layer two with like four block per second. And I think the contribution of the uniswap to the Ethereum ecosystem will be 1% of what it used to be, regardless of the success of Unichame. Because even if they do 10 times more trading over a day, they will not pay 10 times more fee to the Ethereum ecosystem.

Starting point is 00:49:24 it will be a fraction of what they are paying right now. And if AVE does the AVE chain and then create you of like a compound chain, a morpho chain, a ure chain, a ure chain, a ure chain, and who's going to pay the cost to Ethereum? And who's going to, like, the success of the Ethereum ecosystem actors do not contribute to the infrastructure that generate those success. And that's a very, like, pessimistic.

Starting point is 00:49:54 chain of dealt if you think we are going in that direction. Well, I mean, compound chain was supposed to be on cosmos. Don't forget, right? They weren't even going to build an L2. The idea, at least my idea, the idea that I believe, the narrative I believe back in the olden days of like, you know, the launch of L2s was induced demand. This idea that like excess capacity would induce demand.

Starting point is 00:50:19 And I think that in a vacuum it would have. Like if Salana didn't exist. exist and all of the meme coin activity was happening on L2s and not on Solana, I think we'd be in a better place. To your point, maybe it wouldn't make up for like the L1 loss, right? But it could incredibly at some point get there. But at the moment, we're not even close. We have not induced enough demand to fill that gap.

Starting point is 00:50:46 We need BlackRock to come and save us or something. Yeah, I mean, I think the main two metrics that I'm looking at, that to me basically really, you know, put a question mark over Ethereum's future is, first of all, so many new users came into crypto through Solana this cycle. You know, just the phantom wallet, like, you know, became one of the most downloaded. I think it actually became the top wallet. And then, you know, the fact that Electric Capital cited that most new devs, or the highest number of new devs went to Solana over Ethereum. It was the first time since like 2016 or something like that.

Starting point is 00:51:32 So those two factors, I think, are quite concerning. I also feel like, in a way, the reason why Base hasn't launched a token and is, you know, basically, yeah, just is kind of all in on promoting Ethereum and being part of Ethereum, is basically because they don't need to make money the way that the other L2s do. And so Coinbase, you know, they must be like believers in this modular thesis or, you know, be pro-Etherium or whatever. So they're kind of like using all the money that they make from all the other things that they do to promote that ecosystem. I'm sure you've seen on Twitter all these people complaining about the fact that for whatever reason it takes much longer to withdraw to Salana than it does to base. which is confusing on multiple levels when you just think about the technology there, right?

Starting point is 00:52:30 So I do think that in a way, Coinbase is being some kind of like benevolent actor for Ethereum and not as self-interested as they would, you know, normally for like any other normal L2 actor. And that's really helping Ethereum. But, you know, it's almost like they're actually doing something that's not as good of a business decision for themselves to help Ethereum in a way as frankly, I don't know. Is that too strong? No, no.

Starting point is 00:53:00 I think it's maybe even more aggressive than that, right? Like, I think they've inadvertently pigeonholed themselves into the Ethereum ecosystem. Because remember, it's Coinbase, right? Like, you know, they're a battleship. They're slow moving, right? They made the decision, you know, this decision to build an L2 didn't come over a two week period, right? Like at the time that they were making that decision, super chain was like a glimmer in Jing's eye, right? Like, you know, this is stuff that has kind of happened in very slow motion, right?

Starting point is 00:53:34 And so there was a world where like Ethereum L2s were obviously going to dominate. Solano was going to, you know, fall apart. And now we're in this, you know, kind of hybrid SVM, EVM world where like a lot of the activities happening in an ecosystem that they're not touching. And they're really part committed to Ethereum now. I don't know exactly how that plays out. I don't think they can unwind that. You know, if they're thinking about doing, it's going to take a long time to, you know, work through what the implications of that are.

Starting point is 00:54:07 I think it's important to look at the incentive and also the intensity and as a structure. And for example, the example of Coinbase adding slow withdrawal to Savannah, we are talking about a few minutes instead of a few seconds. But when you look at the incentive of Coinbase, when you have so much money and user money, having a piece of inspiration and update that to something that is outside your comfort zone

Starting point is 00:54:36 because Coinbase engineers have a lot of experience in the EVE ecosystem over the years because they operate around that for the past few years. And so now as an ecosystem, it's much new year. And it's on a completely different technology stack than the EVA ecosystem. So if you have a bunch of solidity engineer in your engineering staff, then you have no one with rest.

Starting point is 00:54:58 So you need to find the talent. And then you need to build new index there and new ways to do things. And the reality for your business is that who's going to close their account-based account if they have to wait five minutes instead of 15 seconds? Probably no one. And what's your cost of fucking up the withdraws and having like $1 billion in the wide because you get act. And remember that centralized actions used to get to act very often. And the withdraws and deposits and the bridge are part of their activities, probably the most

Starting point is 00:55:31 critical piece and where they can easily lose money. So maybe there's no conspiracy. Maybe it's just the infrastructure and the natural inertia of adopting a new technology that is outside your confound as a business. If you look at Coinbase Venture, they are deeply. investing in the Ethereum ecosystem, but they are not blind to the other V-N's ecosystem. So I don't think there's any conspiracy there. I think he can be easily explained by just Coinbase being a large company that are some initiative. Yeah, I agree with that. I don't think that, like, to the best of my knowledge, I don't think that Salado withdrawals have slowed down. Like, remember, like, it used to be the case that all withdrawal. All withdrawal

Starting point is 00:56:19 would take like five or ten minutes, right? They would go through like internal processes. I mean, I've been a cracking user for a long time and, you know, they're not instantaneous, right, even on like fast blockchain. So I don't think it's a conspiracy necessarily, but there's no question that there's a reason why base isn't as slow. Like they put the resources into making sure base is as fast as possible and optimizing it, right? They haven't optimized other blockchains. I guarantee you, like coin takes like 20 minutes to do it with draw. Yeah, but they didn't get. So they have the pay.

Starting point is 00:56:52 Yeah. Like, it was nothing for them to add base. And they could add every single layer tube. I think if you talk about conspiracy, is that why you cannot withdraw as fast on every layer two, on Coinbase compared to base. I think that part is more the conspiracy side. And I would understand they will pay a favorite a bit.

Starting point is 00:57:13 And it's just business at the end of the day on that part. But on the solar and a part, I'm not convinced. there's any ill in that. Well, and so, you know, Avey is not on Solana, and you talked earlier about your take on sort of the business decisions or the way that you think about, you know, deploying on Ethereum versus Salana as a business person. Are there certain things that if they were to change on Salana,

Starting point is 00:57:40 that, you know, that would make you reconsider? And if so, what would those be? More money. More money on there. Yeah, more money. Yeah. Yeah, like, I try to participate as one of the service provider, the Avedao, to increase the Avedao button. That's like, that's my focus. So I'm not here to, like, it's not a religion.

Starting point is 00:58:03 Like, it's a business. So if it's interesting for us to go on Solana, we will, we will propose to the Tao to go on Solada as fast as possible. But the reality is that there's never been a point of time in the past, like never, where The Solana TBL was larger than the Avetia. It just didn't happen in the past. And when you look at the data, the defy and the lending part of Solana is not a good business. We make money, the Abedal, on three core business.

Starting point is 00:58:34 Leverage taking, which is a core-ated leverage. So you will take carry trade between two stable coins and you will earn some premium on the different cost between what provides the yield of your coreateo compared to the cost of your debt. A very well-known carry trade on that is EITNA. So if you are paid X percent on your SUSDE, you are incentivized to borrow some USDC or other stable coins and earn the premium of that. It's very well as well on LST and ART. if you make 3% on your WSTE,

Starting point is 00:59:16 and borrowing it costs you 2.5% on Avey. If you do a 10x leverage on that, you have more money doing that. So that's great leverage. There's directional leverage. You have some collateral. You have some Bitcoin. You have some EITs.

Starting point is 00:59:32 You borrow some stable coins because you think the value of your collateral will increase in the future, or you don't want to sell your collateral and use the stable coins to do something else. and you have also a different kind of activity, but those are the core business. And those core business on the Soda ecosystem are weak in terms of economic perspective

Starting point is 00:59:53 for us on the other ecosystem. So that's why we're not there yet. But we monitor the market and we are here to make money. And if that change, of course. I will be one of the biggest supporters to have a VAM Sorana. All right. So I do want to ask a little bit more about what Ethereum's prospects are long-term,

Starting point is 01:00:17 just because, and you tell me if my assessment here is wrong, but when I sort of look at where Ethereum's headed and the various worries or the different anxieties that I see in the community, I wonder if, you know, this kind of modular thesis, like the infrastructure to build it out is maybe going to take a little bit longer to, you know, resolve the issues of like fragmentation, communication, you know, to create interoperability and to, you know, address this fragmentation of liquidity and other things. So when I like look at kind of all the hurdles that they have to get there and then I see just how Salana, you know, is already just working on so many of those levels, I'm like, okay, so for now it feels like Solana has the advantage. But as far as I understand it, at least this was kind of my understanding of the modular thesis

Starting point is 01:01:16 when I learned about it is that over a long enough time period, it feels like that would be the more kind of, I don't know how to say it like maybe more robust or flexible, just adaptable architecture and would appeal to a wider variety of people because they would be able to tweak, you know, the developers would be able to tweak their products, basically more than they might in an environment like Solana. So really, for me, the question is just, can Ethereum overcome all those hurdles before too much of its market share gets taken away either by Solana or any of these other L-1s that either already exist or that are about to launch? Do you feel like that is the main question? And if so, you know, what do you think is going to happen in that regard?

Starting point is 01:02:04 Like my take is Ethereum is fine. Like it's direction is fine. Am I wrong? Like both of you, you're both, you're both Ethereum people. So we should just get that out of the way. Yeah. So I look, I used to be an Ethereum maxi, right? But I also used to be a Bitcoin maxi.

Starting point is 01:02:23 So, you know, I've been going through a slow motion process. But I've gotten deeply into the Salana ecosystem over the last 18 months, right? I'm building a thing that is chain agnostic. And so I've tried to get into my like magnanimous, you know, neutral phase, right, over the last 18 months. But, you know, I have strong views about both Salana and Ethereum and the different tradeoffs and, you know, what will work and what won't. What I would say is I think both Salana and Ethereum have made it through the crucible of a bare market in a sense that they're both fine. like they're both going to be totally fine. I think the interesting thing is that the perception of the success of a project in

Starting point is 01:03:08 crypto is so determined by price that when you go through a period where for whatever reasons, structural reasons, just cyclical reasons, price action is not as good as the alternative things, right? Because there is an open market of a price action, right? So it's not just like, you know, like 50% improvement in price or 100% return is good, except when the guy next door is doing a 500% return, right? And then the other person's doing 5,000%, right? Like the relative performance is also important as well.

Starting point is 01:03:45 And I think that we saw this loss cycle with Bitcoin. You know, Bitcoin went from 20K all-time high to a 50K all-time high, and people were like, Bitcoin's over. This is the most garbage asset ever. Everyone was so frustrated, right? It was only a 2.5x. You know, at 40K people are like, what is wrong with Bitcoin's? This is horrible.

Starting point is 01:04:05 You know, the previous cycle it had gone from 2K to 20K, right? And so I think that there's this, there's this like, you know, view that Ethereum is not doing well. That is solely driven by price action. That is absolutely detached from the reality of Ethereum. It's just the price action. And I think that this cycle, for a bunch of reasons, the theorem price action has been suppressed, right? And people then post-talk rationalize why it's bad. They start looking for the narratives as to why it's bad because the price action is bad.

Starting point is 01:04:42 I think if the price action had been good for some other independent, non-fundamental reason to get back to fundamentals, right, that people would be doing the exact opposite and confabulating all of these reasons why Ethereum is amazing. and it's the best because of X and Y and Z. And so I just think it's like very determined by price action and price action for Ethereum, this cycle has been bad. Maybe next cycle it's going to go from, you know, 5K to 100K. Who knows? So you're not worried about this like five-year roadmap and all the things that could happen before. The five-year roadmap is insanity.

Starting point is 01:05:17 I think that like I was there. I like literally was running across the DevCon conference center to get there because I was so excited. I hadn't been excited to go to a talk. I was like, finally someone gets it and they're going to like propose a sensible, tangible, short-term solution to, you know, some of these problems. And then it was like in 2030 and I was like, I'm out. Like this is not.

Starting point is 01:05:42 This is not the thing, right? Like, we already have a long-term roadmap for Ethereum. That's the irony, you know, like the, I think the thing. And it's a very good one. And they are making progress. It's a good roadmap. It's a good roadmap. So if you're going to propose an alternative.

Starting point is 01:05:55 It has to be good on a different dimension, right? It's not going to be technically better, right? Like, you know, Justin's proposal was technically different. It's not technically better, but it's also equally long, right? Like, you need to have some spice in there. Like, do it in like six weeks or something, right? That would have been interesting. That's why I think Martin's idea of like canonical L2s and like, you know,

Starting point is 01:06:20 I jokingly said like Vitalik should offer to buyback all of the. L2 tokens. That would have an impact on dissection, right? Like, just ban L2 tokens and reabsorve them into Ethereum. I think we can go deeper

Starting point is 01:06:34 to wrap it all. Like, I think LST should not exist. Like Lido, I love Lido and I use Lido and Lido is a huge part of the other ecosystem. But why Lido exists? Like, in the sense that it should be native to the protocol.

Starting point is 01:06:48 You should be able, when you stick 30 to eat, to be issued 32 stack it directly without any intermediary. because it doesn't make sense that you don't do that. And I think they have a very terrible lack of foresight of all the protocol should be used because I think there's a segregation and a deep gap between the people that builds the Ethereum as an infrastructure and the people that built on top of Ethereum on the application here. And I think that divide has created more and more frustration over the years,

Starting point is 01:07:22 where you have the builders on top of the infrastructure that basically don't talk anymore and have some, as you say, angst, Laura, at the beginning of this podcast, toward the builder of the infrastructure. And I don't think that's a very healthy relationship. The fact that everybody agrees on the application side that the Ethereum Foundation is doing a terrible job,

Starting point is 01:07:46 like the founder of every single module application building on top of the EVM ecosystem, agree that EF is doing a terrible job. And that's not healthy. So where do we go from there? Well, a couple of things came to mind when you were saying all that. One is that after Eugenlayer was, I can't remember what stage it was at, but basically it was just captivating people's minds at the very least, if not maybe already launched.

Starting point is 01:08:15 I forget where it was. But the point is that Vatelik wrote this blog post saying, you know, when would we incorporate certain things into Ethereum itself? And I thought that it was, like, leading to some announcement like that and then nothing happened. So maybe, yeah, maybe he was just doing some kind of abstract theoretical, you know, essay writing, basically. But it does feel like, and actually, why do we now talk about the Week in Ethereum thing? Because this is really what sparked a lot of criticism of the foundation. it really does call in a question, like, you know, what does the foundation, what is the

Starting point is 01:08:55 purpose of the foundation? Why does it exist? What should it be doing? So just to give listeners a little bit of the backstory, basically on New Year's Day, Evan Van Ness, the creator of the Week in Ethereum newsletter, published a post saying that the Week in Ethereum was ending because the newsletter, I guess, had been receiving a modicum of support from the Ethereum Foundation, but that the foundation had decided not to continue that support, even though Evan claimed he had told them that if they did so, he would immediately terminate the newsletter. So this set off a firestorm, you know,

Starting point is 01:09:29 people were criticizing the Ethereum Foundation, like kind of, you know, lamenting the shutdown of Weekend Ethereum. But then a couple of days later, Josh Stark of the Ethereum Foundation replied to Evan on X saying that, Actually, his funding was for him to advise on their grants program, not for weak in Ethereum. And that back when, I guess, they had informed him they were going to cut off the funding for that advising work, he had said he would immediately end weak in Ethereum rather than look for a buyer or try to wind it down in an orderly fashion. So they kind of had this little back and forth.

Starting point is 01:10:10 and during that period, Evan accused the Ethereum Foundation and Josh of being opaque about the eight-figure grants the EF has been making. And this basically escalated into a much wider ranging discussion about the Ethereum Foundation overall. People were criticizing the EF's X account for not having made an original tweet as opposed to a retweet since April of 2022. That was crazy. You know, April 2020 was like before the Terra Luna collapsed. So it's been a while. After that, they're like, all right, we're never tweeting again. After they shield Tara Luna, right?

Starting point is 01:10:50 They were like, okay, we're shutting me account down. To give context, like I discuss a bit with like insider inside the Ethereum Foundation in the past year a few days. And even we have a relationship over the past three years. there's a deep PTSD of the complete hostility of some co-fenment, especially the US one, towards a decentralized platform and disfranchised infrastructure like Ethereum. And right now they don't feel they have the capacity to do much. And I think that's a problem because the times are changed,

Starting point is 01:11:29 and I think we are reaching a pallid shift of what you can and what you can do. And when you look at the market and the industry and you see other actors like similar actors and similar fractured and what they do, my chain of thought is that if they can do that, maybe we can do 10 or 20% of what they do and be completely fine with it. But the current leadership of the Ethereum Foundation, I think that's a problem, is very conservative of their ability to do or do not as specific things. And I think that has friction to, uh, their impact in the ecosystem. Like my, you know, I've talked about this quite a bit, but like the point from me where

Starting point is 01:12:12 I was like the Ethereum Foundation has jumped the shark, right? It was when I had joined and there was this post that was like our new philosophy is this like philosophy of subtraction. And it's like, you know, grooming a flower by removing the things. thing to make it more beautiful. And I was just like honestly get the fuck out. Like please, like this is not how you run a thing. Like only an insane person would think that that was a reasonable approach. Right. And when that is the message that's being sent out broadly, right, that like, hey, you know, we are going to do less to make room for the garden to grow.

Starting point is 01:12:59 Like, no. Like the garden was fine. Like people were doing stuff. everyone was working hard in the garden, like get in the garden and also do some stuff, right? Like it just was the wrong message to send. And I think to Mark's point, you know, okay, yes, we've had this chilling effect from regulators that have been adversarial, but there's plenty of people who are out there who are still doing stuff, right? There's plenty of people that are taking risks in the Ethereum community, you know, like it's not like no, everyone said, okay, let's be risk off, right?

Starting point is 01:13:32 The EF of anyone should be willing to take some risks. They've got the resources to defend themselves. You've got, you know, small startups out there, YOLO, you know, trying to win. And the EF is like, oh, whoa, no, you know, we don't want to do anything too crazy. Like tweet, it's madness, right? And so I think that, like, there needs to be a shift from a leadership perspective of, hey, we're actually going to come out and we're going to do things. and we're going to advocate for Ethereum.

Starting point is 01:14:03 And Vitalik has started doing this, right? Like, he got the message. There's a bunch of people that have been agitating, including myself. And I think he got the message. You got the message in terms of, like, engaging with defy. He got the message in terms of, you know, going out there and being more supportive of Eith. And I think to Mark's point, like, we're in an environment now.

Starting point is 01:14:23 We're shifted. But I still don't think that justifies the last four years, right? Like, yes, it was an adversarial environment. But people were out there taking. risks, the EF should be out there taking risks. Of all the people that can afford to take risk, they can afford to take risks. I will be more blended that. And I will probably make some enemies, but you know me, I'm Jane So Zeller. So it's fine by me. I have nothing good to say about Miyagi, a leadership of the Ethereum Foundation. When I started my involvement in the Ethereum

Starting point is 01:14:53 ecosystem, the leader of the Ethereum Foundation was Mick Chan. And she was not a perfect person. She had their own flow, and I don't want to go back that deep in the past because a decade ago doesn't make sense. If people are interested, you guys should read my book because that's a big storyline in there. But anyway. But what I would say is that Ming Chad was a business-oriented person. And I think Miyaguchi is a non-profit research-oriented person. And I think what we need at that stage of Ethereum is to be more, a bit less on that pure research and ivory-tory. side of things. And that's what I say about it. And I think it's the right time right now to

Starting point is 01:15:33 change the leadership of the Ethereum Foundation and to have a new directionality of how we manage things. Huh. So there are a couple of remarks I want to make. First is that, you know, this fear that the Ethereum Foundation or Vitalik really had about regulators. I mean, it's baked in from the very beginning. Like when you read my book, like, even even just in that fundraising period before the crowd sale, it was just like a huge thing for them. They were very nervous. And I think you're right that, you know, that really hung over them in a big way. And it's now almost been baked into how they operate.

Starting point is 01:16:14 And so the fact that, you know, even after the Ethereum ETS were approved in the U.S. that they didn't like change their attack, I think really says something about how they just have that so ingrained in how they operate. that they can't even think outside of that. It's like when, you know, you have like a dog or something that has like an electric fence. And then once it learns that it can't go beyond that, like even then once you take the electric fence away, it will never, you know, go beyond that. And it's sort of like what the EF, I think, is like at this moment. But I also just wanted to say, yeah, like in terms of other projects doing things, like Salon is a great example. because obviously Solano was named as a security by the SEC,

Starting point is 01:16:59 and they're obviously doing fine. And things are going to change in a big way. Not a security, but like, you know, like if that's the worst thing that they can do to you, like, you know, everything was a security according to Gensler, right? So, you know, like if you're going to play defense because you've got a crackhead running the SEC, then like that's a bad choice right like and this is this is the thing that I think like you know I've said this a lot but there there was a moment in time a couple of years ago where shifted from we have well-meaning people that are trying to work hard for efficient

Starting point is 01:17:42 fair markets and we just need to educate them why defy is better to these people are trying to kill us and we need to kill them back and guess what? what we did. We actually did. They're dead. Like, some of them are dying. Some of them are already dead. But, like, we've actually just cleaned them out, right? And that was the shift that needed to happen. But where was the EF in that? Like, yeah, they were nowhere. Put the flower pruning thing down and pick up a gun and shoot someone. Like, seriously, like, we're in a war. Like, this is a war and we're trying to survive. And you're not supporting. Like, this is not helpful. Right. So I just think like we need a wartime CEO in the EF. That's what needs to happen. Not someone who's trying to,

Starting point is 01:18:31 you know, subtract or whatever the hell they're doing. Yeah. You know, it's quite a poetic because Ikebana was used to be an altar done by Samurai. So maybe it's time to drop the flowers and take this world. Yeah, pick up the sword. Exactly. So Mark, you made a proposal on an axe. Can you discuss that here and elaborate on why you had those ideas? Yeah, I think the whole idea. Obviously, if you want to generate engagement and spark some public discourse on the topic, you have to be provocative. So my proposition on X was to fire all leadership position

Starting point is 01:19:12 and do 80% headcount reduction on the soft-scale roles of the EF, because I do believe that on the dead side of things, to be fair. The Ethereum Foundation is crushing it. Like we got the merch that was a massive success. We have five different consensus and execution client, which is unprecedented in the blockchain ecosystem that are operating in sync. And we do that has infinite complexity to do upgrades.

Starting point is 01:19:44 And we still do them on a regular basis. We have done upgrade on many, many things. the infrastructure side of things. So that's good parts of the Ethereum Foundation. I think on the research development side, they are crushing it. But on the soft skills part, they are just absolutely terrible. And I think there is a mindset issue on the Ethereum Foundation. So we need to spark a new paradigm.

Starting point is 01:20:10 And a good way to do that usually is to do a shock therapy. It's to purge the Ethereum Foundation from the actor of the old mindset and introduce new actor with a new mindset and to change the rate of the Ethereum Foundation. Because when you look at the numbers, the Ethereum Foundation is actually doing okay in terms of finance. Like the budget is $130 million last time I checked. Somewhere in that area, I think we can have that and have as much impact on the development side. And instead of spending on clueless initiatives that are do good, social good, whatever, but low impact on actual the bottom line of the ecosystem in terms of growth, we can have a 50, 60 million dollars,

Starting point is 01:20:57 a yearly budget, Ethereum Foundation that is crushing it compared to everybody else in the ecosystem. All right. Well, yeah, so these are obviously pretty spicy suggestions. We'll have to see, like, honestly, I'm not sure if the foundation will do anything because they just have a tendency to not do anything. But the last thing that I wanted to call out was a tweet where somebody, Zero X Mauuco, basically said that a lot of this drama is the result, quote, of not having governance protocols for Ethereum. So do you feel like Ethereum would, you know, not be having this sort of identity crisis right now or this? It would be a nightmare. It would be an absolute nightmare.

Starting point is 01:21:42 Oh, my God. Like, if we had the type of governance that we have in D5 for the EF, just kill me now. Like, no. One thing that is important to remind everybody, there's governance on the Ethereum infrastructure. There is. The rough consensus governance structure is very, very robust

Starting point is 01:22:01 and resistant to capture, and it works. Like, please, like, I remember vividly when there was the proposal to create the dev fund and we're going to siphon off. Like, that would have been the worst possible thing you could do for Ethereum is to create a honeypot for people to start trying to grift from.

Starting point is 01:22:18 At least, the one thing you can say for the EF is it is very opaque. It's hard to break in. Some people have cracked the code and been able to grift their way into it. But it's hard. It's not an easy thing. It's very insular. That's, I think, a feature and not a bug. So in that respect, I think the Ethereum Foundation is somewhat impregnable.

Starting point is 01:22:39 You can't really get in there and grift them as easily as you can other foundations. But as a protocol itself, every upgrade. of the protocol is opting. So you have as a staker to update your clients on the execution and the consensus side to accept the change. And

Starting point is 01:22:59 sometimes, not every time, but sometimes it's a bit controversial and that leads to discussion. And what the EF need to remember is know that we have the LST because they allow that to happen and that we have the LRT and we have the DFI ecosystem

Starting point is 01:23:15 and we have the stable coins that are so large. There's been a lot of article about that in the past few years, is that at some point, if something really piece of LIDO or a compound or a big protocol, there's the means to say to the EF, well, that's not going to happen. And that did not happen in the past, but I do expect that in the future will have like some staker, mini-empties and activism because you have a graffiti field when you actually... produce some blog to pass a matchage to the community.

Starting point is 01:23:51 And at some point, like in the past few weeks, someone suggested, well, we just should put a message where the EF matchage or this kind of stuff. It did not amount to anything at the end, but I think it might happen in the future. And the reality of Ethereum is that if a circle doesn't want to do an upgrade, what you've got to do.

Starting point is 01:24:12 And if Avaida doesn't want to do an upgrade, what you're going to do. Maybe you can do their upgrade anyway, but that will lead to an arc fork and so much consequence in the ecosystem that might create a lot of problems down the line. So I'm not saying it's like circle control of Ethereum or have a control of italymp, that would be like crazy to say. But I have, what I'm saying is that there's some form of soft governance,

Starting point is 01:24:39 of tacit governance that exist in the Ethereum ecosystem, where you need some form of alignment to the big ecosystem them actors on the application side of things, and infrastructure cannot be blind and deep completely to what happened to people building on top of them. And what do you guys think about, you know, the kind of Justin Drake proposal and the Martin Kauffelman one that we discussed, the native roll-ups? Like, do you, you know, does it seem like there's a decision being made either way? Like, is Justin's just going through because of his position? because it seemed like a lot of people were excited about Martin's idea,

Starting point is 01:25:17 which would be kind of quicker and easier. I don't think it's tenable. Like, it's a fun meme, but I just don't think it's tenable. I think like that ship sailed a long time ago. I mean, you know, it would take so much coordination and there's so much money at stake, you know, billions and billions of dollars at stake in L2 tokens, rugging them, even if you let them exist, you know, as like some second-class citizen, these canonical L-2s, I just, I don't think we have the mechanism for implementing something

Starting point is 01:25:53 like that, unfortunately. And I don't think that that's something you actually want. As I said earlier in the podcast, Lido should not exist in the sense that I believe it should have been native, but Lido do exist. And I think it makes sense that has Lido do exist. that we do not try to hurt LIDL unnecessarily. Because at the end of the day, when you have an industry that developed, and as an infrastructure, if you stop ragging the people that contribute to your success, that's saying the very clear

Starting point is 01:26:27 message to everybody that might think about building on top of Ethereum is that, oh, if Ethereum Foundation doesn't like me, they're going to kill my industry as a role. and I'd rather be a little under infrastructure. Like, you cannot do that, obviously. Interesting. But so if you, okay, if you think about this, though, right? Like, you know, I know I said you can't do it. But if you genuinely, if you had a gun to your head and someone was like,

Starting point is 01:26:54 get rid of the L2s, the only approach that you could offer, really? My understanding, I didn't think Martin was saying to get rid of the L2s. I thought he was saying to add additional L2s that are native to Ethereum. But I think that's actually a compromise. it's a bad compromise, right? Like, to Mark's point, if we should get rid of Lido, we should get rid of arbitrament optimism, right? We should have canonical L2s that run on ETH,

Starting point is 01:27:19 that consume ETH that don't create this fragmentation and choice paralysis of like, which token do I buy if I'm aligned with the Ethereum ecosystem? So you could, in theory, make a proposal that says we are going to put ETH inflation, some amount of ETH inflation, into each of these bridges and basically lock up all the tokens and burn them and, you know, buy them back at 50 cents on the dollar or something like that, right, especially for the locked

Starting point is 01:27:46 escrow tokens, you know, there's, whatever it is, 50% of arbitrams not circulating and same thing for optimism or something like that, right? And, you know, you offer to buy back all the tokens with like, eth inflation. You could do that. It's like, in theory possible. Could you pull it off? Like, is there enough consensus to pull it off? I don't think so. Maybe a good EF could pull it off if they were, if, you know, if they had the power. Vitalik could probably pull it off. If Vitalik proposed it, it would probably work. Like, listening to you, it does make me think, oh, I feel like this is how a lot of kind of, you know, big titans of corporate titans of years past have gotten disrupted where they didn't want to kind of change how they were doing things.

Starting point is 01:28:35 So it's almost like this question of, you know, should Ethereum make Lido and Egenlayer and layer 2 is like, you know, part of the base layer or incorporate into Ethereum itself. Like maybe that's what's needed to disrupt themselves to make sure that they maintain their leader position. Like I don't know. Yeah, but Laura, where do you draw the line? Because if you say that, why Uniswap should not be native, why Avey should not be native, why the stable coins, like sky should not be a... You become a communist chain, which is...

Starting point is 01:29:09 Exactly. You know, really not that far away from... Yeah, then it's like meta. It's like the centralized company is just acquiring more. Yeah, I know. I know. But I'm just saying that, you know, the way that you were expressing it, I thought, oh, I feel like I've heard this story before.

Starting point is 01:29:27 But, you know... I think you're right. I think there's also, you know, talking about meta, platformers. Right? Zinga, like the lesson of platform risk is runs through all of startup land, right? This idea that you go onto someone's platform, they say, hey, come and build on my amazing system. I've got all these users. I've got distribution. I'm going to do RevShare with you.

Starting point is 01:29:49 I'm going to do all this cool stuff. And you go amazing and then you build this cool game. And then they go, uh, that's mine. And you're like, no, no, no, no, I built that. And they're like, no, no, no, that's mine. And then they just either clone. clone it or buy it or take it or, you know, put a gun to your head and say, give it to me or else, right? And I think if Ethereum were to do that now and rug all the L2s and say, and again,

Starting point is 01:30:13 it wouldn't be a rug if they offered to buy them, right? But if they said, we're going to shut you down if you don't sell your technology to us, right? It would be a very chilling effect for whatever the next technology evolution is. And in reality, the market forces that allowed stockware, optimism, arbitram to compete and give us this very vibrant LTO ecosystem that we have, if the EF had been in charge of delivering that, it would have taken a lot longer. I think that would still get there because to Mark's point, they have amazing researchers, right? But market forces are always more powerful.

Starting point is 01:30:49 So if you have this centrally planned economy that's all run by the EF researchers, I don't think you have as a robust platform as we have today. And so it's a harsh tradeoff, but I think it's a harsh tradeoff. but I think it's a trade-off that's worth making. It's funny where we do a podcast about all communism is bad. I think we already agreed on that. One other question I just had to ask you guys about was the fact that there is a lot of criticism that Athena is actually the reason

Starting point is 01:31:20 that the Ethereum price has been a little bit depressed this year. You know, Athena famously is based on this Delta neutral hedging position, or a hedging strategy that partially requires the shorting of ETH. And so I have seen this narrative that that is the reason that the price of ETH has been depressed, especially in terms of the ETH-BTC ratio. And I wondered what you thought of that theory. It's, I think it's nonsense, but I understand where it comes from, right? So in the original Athena proposal, the proposal was, and this was like the original

Starting point is 01:31:54 implementation, you turn up and you give ETH to the protocol. and it then takes that long, ETH, spot ETH position, and then matches it to a short ETH position and generates the stable coin. But I was always a little bit confused about that because I was like, you lose your exposure to ETH, who is the counterparty that wants to do to that trade? You're making it really inefficient

Starting point is 01:32:19 because if I have stables that I want yield on, now I've got to go and swap the stables into ETH to provide to you. Athena worked this out without even telling anyone to the best of my knowledge, Right. And because remember, there's like a permission cohort of people that can mint SUSDEE, right? USDE and SUSDE. And so they worked out like, I think a few months in that it was really dumb to have people provide steak D. And they just said, give us your stable coins and we'll do it for you.

Starting point is 01:32:49 And so people then started turning up with stable coins. And then they go and buy Spot Eath pushing up the price, you could argue, right? Like by this logic, they're just as much pushing up the prices as, you know, suppressing it. And then you short the perp, right? So you end up being delta neutral. And ideally, you know, there's nothing there. And there's an argument for like by doing this process, what it actually does is keeps the funding rates low, which then induces demand for people to go longer, eighth, right? If funding rates were higher, all things being equal, people would be less long, eth because the funding costs would be much higher. And so the marginal buyer of long ETH positions is bigger in theory because the funding rate is suppressed or compressed, you could say, by this carry trade.

Starting point is 01:33:41 And it's all people just looking for yield on their stables that were otherwise just sitting there idle. So, like, this is a nonsense argument. But I get how you could get yourself there. One thing that I think I agree with you 100% of these salaries. One thing that I won't remind people that are listening to us is that every short need to be closed at some point. So when you short, it's a sale that is a guaranteed buy at the end of the day, beat it as profit or at a loss. Because when you open a short position, you have to close it.

Starting point is 01:34:13 You cannot open it forever. So what they do effectively and factually is that they turn stable going into buying some eat and they actually buy it. And then they open a cell position that they have to close. close at some point, so they have to buy it again to close the position. So the whole arguments and everything else that Keynes said is completely unpoint, but the whole argument doesn't make sense to be as well. Okay. And just to call this out specifically, I did send you guys both a tweet thread by Ben Lilly, where he did an analysis and he was saying that when money flows into Athena, actually the ether price does get a little bit depressed in that when outflows,

Starting point is 01:34:56 happened from Athena that the price, at least relative to Bitcoin, goes up. But you feel like it doesn't matter that just... I looked at the thread. I just don't, I don't see the relationship. Like, the underlying relationship, even the assumption in that thread was that people are providing ETH, right? And that then, you know, it's like that long ETH is being married, but it's actually not what's happening. And the other thing is that like, you know, 67%, which again, And you could argue that Athena is not communicating as well, because even as an Athena Maxi, I didn't know this. But like 70% of the open interest is Bitcoin denominated now, which kind of blew my mind.

Starting point is 01:35:35 I thought it was like 0%. So I was really surprised to see that. The really important thing to remind people that are listening to us is in data, it's a bad to pass to try to force correlation between things that you observe. in the data. And one simple explanation is that all do it now make money on their short. They make money when a majority of the open interest is long on the market. And that happens when the price goes up.

Starting point is 01:36:08 And that happens because on the bear market, it's very simple. One side pays for the other side. So they make money because short are paid by loans because there's more loans than short in that market configuration. So yes, when there's more long. more volume in it now, that means that people are more loan. So the value of Ethereum is expanding. And when there's less money in Ethereum, maybe the value of Ethereum is contracting.

Starting point is 01:36:36 But it's really important to understand that markets are complex system. And you cannot force correlation to data, but just because it's a narrative. Yeah, like there's a correlation there for sure. It's just not a, it's not causation, right? Yeah, causation. Sorry for my bad English. your item. All good. All right. Well, the last question that I want to ask is, again, kind of looking forward into 2025, this year, the Salana Seeker, which is the new upgraded

Starting point is 01:37:05 version of the original Salonossocket phone, is going to come out. And I wonder what your thoughts were about that. Basically, I feel like one of the main hurdles that crypto has yet to unlock is the fact that these major phone makers are essentially gatekeepers. And Apple and Google, they take a hefty cut out of purchases on the apps in their app store. And so, you know, they have not been friendly to decentralized applications or to crypto generally. And it sort of seems like, you know, for the time that those phone makers remain dominant, that the crypto industry is going to have a bit of a more challenging time. And I wondered, do you feel like the Solana Seeker is going to help the crypto industry

Starting point is 01:37:57 gain a toehold? Or how do you feel like this last, you know, or I don't know about last, but this next major hurdle is going to fall? I think you're operating in that area is adding on top of an incredibly challenging industry. managing another incredibly challenging industry, which is hardware and more especially phone hardware. What I remember about the first saga phone is that the MKPHE, which is like the largest YouTube reviewer of tech, said it was like the worst phone they ever had to review. And I think one large part of the success of the saga is that they forced like a lot of air drops. So if you

Starting point is 01:38:43 bought the phone, you made like tens of thousands of dollars through air drops, but that's a bit of a one-trick point. And the V2, to be a success, we cannot rely on how we're going to air-drop things, because at the end of the day, it doesn't work. We learned that during the 75 summer of 2020, is that if you print tokens of the 10-air and you say, oh, that's real money, well, people will usually prefer to have some USDC or some eat, so instead of those magic internet tokens. UDist to build out of TNair. So it's an incredibly complex, challenging, and industry. And we are not very mature on the crypto side of things,

Starting point is 01:39:26 but I think there's a lot of ambition to say the least, to think they can make a dent in the hardware side of things. Yeah, I think I agree with Mark. And one of the challenges is there's a selection. bias, right? Like the people buying the phone already have crypto, it's not really making a dent in the app store monopolies, right? You know, the Playstorm monopoly. So you have two, you know, Juopoulos who are operating these, you know, app distribution platforms, which have now become payment platforms as well, payment distribution platforms. And their model assumes like zero marginal cost

Starting point is 01:40:13 sales that you're selling software, right? Like, it's just not conducive to selling money. You can't charge 30% to sell someone money. Like, that doesn't work, right? So I think that the only thing that solves this is demand. Sufficient demand from the user base of those things. And I think that it'll happen when it happens and it'll be a tipping point. And then you'll have like, you know, hardware enclaves where you can store, you know, private keys and things like that on an iPhone one day. They'll roll out a whole crypto thing and partner with Coinbase like Apple, you know, loves to do find a partner that they can get on stage at the, you know, iPhone release

Starting point is 01:40:53 and talk about all the cool stuff that they're going to do. Something like that will happen, but it'll only happen from consumer demand for to force them to change. I agree with you, Kane. And I think like the description will come from the hardware to crypto instead of the other way around because if I have an actual secure element in this and I have the same security than a ledger hardware wallet or treasurer. In this device, I already buy and I already buy every couple of years.

Starting point is 01:41:19 Why do I need this? I will stop buying this immediately. I will use just my iPhone. And that's the reality is that I believe there's more chance in the next three to five years of Apple Lipsur, having a secure element, that they already have that for ESIM and data link and your face ID. So they have a lot of experience in that area.

Starting point is 01:41:40 So for them, and they have the cache to develop, that if they think it's a good business for them, then ledger or Savannah distributing the Apple business. I actually think that POSC keys will be a Trojan horse here because you will soon be able to store arbitrary data in POSC keys, and we already have secure enclaves for POSC keys in Apple devices with the latest iOS. So I think we will see this converge faster than people are predicting.

Starting point is 01:42:12 but it doesn't solve the payment, you know, monopoly, right? This 30% cut in the app store, that's a different problem. It'll just, you know, require PWAs and there'll be a sufficient demand that they'll go, we can make more money by taking a 1% cut of all crypto transactions and have crypto transactions, then try to take a 30% cut and, you know, only get scams or whatever. And that's going to work. And I think that's good business to do that, because people will pay a convenience stacks up in the issue. If you look at the MEDAMA swap, the fee is atrocious compared to what

Starting point is 01:42:47 you can do using like one inch or something like that. And yet the back minutes. Yet the back minutes. It's the same thing for other platforms. Sorry about that work. And just to understand what you were saying, Kane, when you said that the past keys could be a Trojan horse, are you saying that essentially that would turn your phone into a sort of hardware wallet? And so then you could send transactions on chain without them needing to go through. through without them needing to. Yeah, I guess, is there a lead to? You'll be able to via a browser, right, via Safari, interact with the defy

Starting point is 01:43:22 app without having like a browser wallet or a plug-in or an external hardware, Bluetooth device or something like that. It doesn't solve the app store problem. Okay. You'll be able to store pos keys in Apple password manager that have, private keys embedded in them that will allow you to interact inside of apps and sign messages, sign transactions. But that doesn't stop the actual distribution problem of the app needs to get through the app

Starting point is 01:43:55 store. And if the app is selling digital goods, NFTs. Now, if you're selling NFTs, yeah, fine, give Apple 30%. No problem because there is zero marginal cost for you to do that, right? But if you're AVE, that doesn't work. Yeah, but I think Apple will evolve. on that if that's a good date of business for them. Correct. They just need

Starting point is 01:44:15 the consumer demand for it. And people don't realize how easy it is through everything you said and also that's where the industry as a world is going towards. When you look at the Fido2 standards

Starting point is 01:44:31 that is getting adopted, I sure you have more and more pass keys in your account because it's getting adopted across the world web too. And people want to read of the whole user notification password system to go through pass keys. And also the industry is evolving toward that pass with more and more emphasis on account abstraction and smart accounts and smart wallets that can be powered by this kind of stuff.

Starting point is 01:45:02 So I think the real question is what has the change of being a significant actor in the hardware part of the industry, when the hardware part of the industry has a so seamless path toward disturbing you as a doctor. All right. So last quick question before we close out. This is like one of the longest recordings I've ever done. But obviously, this is the first big show of 2025. So I was wondering if you would want to leave us with one prediction for the year for crypto?

Starting point is 01:45:38 You want a good one or how that one? Optimistic or pessimistic? Whichever. Or if you have more than one, you can, yeah, go ahead. I can do both, and I'm sure of that. 2025 will be extremely a year where there's going to be a market expansion in terms of attention, in terms of innovation,

Starting point is 01:46:07 in terms of all these kind of things. But I think there's also a very high chance that 2025 will be the start of the market shift toward a new bear market. I hope it will be later in this year. But I think there's a very high chance. We shift the market dynamic to something that is more flat or downturn during the year of 2025. So it's going to be a great year. But probably at some point,

Starting point is 01:46:37 of the year we're going to change the paradigm in terms of the actual IT of the market. Okay, Kane. For me, this is a bit self-serving, but I think that we're going to see a proliferation of applications that are on-chain that offer the same user experience and utility that we have from existing centralized platforms. And I think it will be the year that we shift away from the majority of activity happens inside of centralized platforms. The majority of crypto transactions happen on Binance, on Coinbase, etc.

Starting point is 01:47:13 And we shift out into the majority of transactions happen on-chain in open on-chain platforms. Interesting. It'll be the tipping point. That's like some point this year, it'll shift. All data metrics lead to that conclusion. And if you look at it, there's more and more on-shade trading, more and more on-chain lending, or more and more on chain investments and all this kind of stuff. And I do agree with you.

Starting point is 01:47:41 That's the tipping work. Okay. Great. Well, where can people learn more about each of you and your work? To me, it's very simple. Just use AVE and you can go on the AVE governance forum. You will see a lot of long post from me. And if you want something that is more funny, I guess, you can find me on social media

Starting point is 01:48:02 through the account, Lemisgate, and the AveChab account. you can find me on X, K-A-I-N, and you can also follow Infinex, which is my project that I founded. So both of those are two ways to follow what's going on. Perfect. Well, this has been a marathon show. Thank you both so much for coming on Unchained. Thank you so much for inviting us, Lord. Yeah, thanks for having us.

Starting point is 01:48:32 Thanks so much for joining us today to learn more about Kane, Mark, Ethereum, Drama, and the upcoming year of 2025. Check out the show notes for this episode. Untained is produced by me, Laura Shin, well-up from Matt Pilchard, Juan Aranovich, Megan Gavis, Pammy Jomdar, and Markukuria. Thanks for listening.

Unchained - 2025 Will Be a Year of Crypto Competition. Can Ethereum Make a Comeback? - Ep. 760

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.