Unchained - How Solana and Binance Smart Chain Could Take Ethereum's Lead - Ep.240

Episode Date: May 25, 2021

Kain Warwick, founder of Synthetix, and Kyle Samani, managing partner at Multicoin Capital, debate the merits of Ethereum, Solana, and Binance Smart Chain. In this episode, they discuss: why Ethereum is losing market share to Solana and BSC whether decentralization matters and at what point decentralization becomes redundant why they think Solana and Binance Smart Chain need to be taken seriously as competitors to EThereum whether BSC or Solana is the bigger long-term threat to Ethereum the biggest obstacle to Ethereum’s success (and it’s not gas fees) how Ethereum will navigate fragmented Layer 2 solutions Solana and its lack of developers what differentiates DeFi from CeFi why Solana has an edge on Ethereum in terms of composability  how Ethereum will onboard new users why Kain is such an ardent backer of Ethereum why both Kyle and Kain think EIP 1559 and the potential for higher ETH prices is bad for Ethereum if Synthetix would ever consider launching a cross-chain product the viability of a multi-chain world why Kyle believes the future holds a winner-take-most blockchain ecosystem   Thank you to our sponsors! E&Y: https://ey.com/globalblockchainsummit  Crypto.com: https://crypto.onelink.me/J9Lg/unchainedcardearnfeb2  Kyber Network: Dmm.exchange    Episode Links   People Kyle Samani Twitter: https://twitter.com/KyleSamani  Multicoin Capital: https://multicoin.capital/  Kain Warwick Twitter:  https://twitter.com/kaiynne Synthetix: https://synthetix.io/    Content Kain’s tweet that instigated this pod: https://twitter.com/kaiynne/status/1387266949302734852 Multicoin Blogs: New $100m fund focused on Solana https://multicoin.capital/2021/05/04/announcing-venture-fund-ii/  BNB Investment + valuation https://multicoin.capital/2019/02/19/binance-coin-analysis-and-valuation/  Investment in Solana https://multicoin.capital/2019/07/30/the-world-computer-should-be-logically-centralized/  Ethereum analysis https://multicoin.capital/2019/05/24/the-unbundling-of-ethereum/ Value Capture at Layers 1 and 2 https://multicoin.capital/2019/03/14/on-value-capture-at-layers-1-and-2/  Kain Warwick and Sam Bankman Fried podcast https://www.cryptonotes.org/2020/10/sbf-kain-blockcrunch-117/  Comparing AMMs on different blockchains https://www.coindesk.com/pancakeswap-uniswap-sushiswap-crypto-defi-exchange  BSC and Solana NFT platforms https://www.theblockcrypto.com/post/102959/binance-is-launching-its-own-nft-marketplace-in-june https://www.coindesk.com/banksy-burners-raise-3m-to-build-nft-platform-on-solana  Overview of Layer 2 solutions on Ethereum https://ethereum.org/en/developers/docs/scaling/layer-2-rollups/ Binance Smart Chain guide https://defiprime.com/binance-smart-chain Solana guide https://thedefiant.io/solana-defi-ecosystem-overview/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, a journalist with over two decades of experience. I started Kevin Crypto six years ago, and as the senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. Sign up for my newsletter, where you can read about how to pre-order my book, The Cryptopians, Idealism, greed, lies, and the making of the first big cryptocurrency craze. Head to Unchainedpodcast.com and the sign of for the email newsletter is right on the homepage. The Crypto.com app lets you buy, earn, and spend crypto, all in one place. Earn up to 8.5% interest on your Bitcoin and 14% interest on your stable coins, paid weekly. Download the crypto.com app and get $25 with the code Laura. The link is in the description. Khyper's Dynamic Marketmaker, DMM, is the first defy protocol designed to adapt to market conditions to optimize fees, maximize returns, and enable extremely high capital efficiency for liquidity

providers. Today's episode is sponsored by EY blockchain. Ernst & Young is committed to supporting integration of the world's business ecosystems on the public Ethereum blockchain. Today's topic is whether Ethereum needs to worry about these ETH killers, the new generation of them, the prime examples being Solana and Binance Smart Chain. here to discuss are Kane Warwick, founder of Synthetics, and Kyle Samani, managing partner at Multi-Coin Capital. Welcome, Kane and Kyle. Thanks for having us. Hey, Laura, good to be back on the show. I'm looking forward to this. This is to be a fun, spicy, spicy debate. Yeah, should be. I know. That was exactly what Kane and I were discussing when we were figuring who his conversation partner should be. So listeners should know that the impetus for this show was a recent tweet,

that King wrote up, saying that he was concerned about the Solana and Binance smart chain communities, quote, genuinely gaining organic traction, much more so than, say, EOS or Tron of the last cycle. King, can you explain your thoughts more on this score? Yeah, so, you know, I think back in 2017, 2018, you know, Tron and EOS made a pretty decent attempt at generating some traction and getting smart contract developers to migrate. You know, certainly EOS threw a lot of money at that process. And we just saw that, you know, they didn't really get much traction. Obviously, it was a different part of the market cycle.

It was a bare market. It was much harder to get, you know, traction back then. But what we're seeing now, you know, especially with the high gas prices on Ethereum, is that there appears to be a bit of an opportunity for chains. like Solana and Binet Smart Chain to really start shipping away at the ETH dominance. And, you know, my thread was really about a bit of a wake-up call. I think that the ETH community can't just be oblivious to this, that, you know, this is actually happening and we need to at least consider the momentum that these chains are getting. And Kyle, I'm just curious, do you agree with

Kane's description? And I'm assuming that you would not be super concerned about this because you have invested in both Solana and Binance. So what's your take on what you're seeing? Yeah. So I'll preface everything. I'll preface this kind of whole podcast episode by saying that multi-coin is quite long eth. We're actually more long eth than Bitcoin.

And we're even more long that on Seoul and finance. So yeah, we're long kind of all of the primary subjects of this conversation. We have felt for a long time that, the Ethereum approach to scaling was just not going to be sufficient. Not that it won't work, but it will just not be enough. And two years ago, it was kind of a fuzzy claim, but there wasn't enough kind of clarity on how exactly it was going to work. But our intuition was that it just wasn't going to get there.

And fast forward today, and we have a reasonable sense of how the ZK roll-ups are going to work and how the opposite roll-ups are going to work. And we can kind of sort of reason about how the interoperability would do these things will work. I feel more convicted than ever that the scaling solutions that are here today for the theory ecosystem are simply not enough. I think Solana is not sufficient

by probably two to three orders of magnitude or I think what the theorem ecosystem is proposing is by five or six orders of magnitude away from the institution. But I've just always felt you have to just try other angles and see where these things go. And the primary constraint is just parallelism. And I think that's super important

I think it's very important for the long-term health of all decentralized finance and all of crypto to make sure we maximally explore the full design space and tradeoffs of these different ways to scale, as opposed to being dogmatic about which set of ideologies is the right approach. We're bullish all three approaches, obviously, to different degrees. But we certainly think all three have a lot of room to run over the next 12 to 24 months. And when you mentioned that about parallelism, are you saying because you just feel like sharding is not the way to go? Or what did you mean by that? If you look at roll-ups, roll-ups specifically break what I call logical centralization,

meaning in a roll-up, if you have a transaction happening in the base layer, the base layer doesn't know what roll-ups are. It's actually just not a logical concept that exists in the base layer. And similarly, if you're in a roll-up, if you're in a roll-ups, roll-on know what other roll-ups are either. And so there are ways to bridge those things together into semi-ish seamless ways to make them interact with each other, but by definition requires

some additional developer tax. That developer tax, whether it's some sort of state channel interface over Connects or something over Thorchain or something over some of whatever. Starkware is doing some stuff and ZK Synch guys are doing some stuff. There's a whole bunch of people working

on different theoretical ways to bridge all of these things together. I have no particular views of which of those methodologies is best. In fact, there probably isn't a best. They all have different tradeoffs. And so as you look at how kind of this heterogeneous layer two world

is going to evolve, There's going to be different layer twos, and there's going to be multiple instances of the same layer two tech, and then different, you know, techs, and making all those things interoperate across zero knowledge flavors, optimistic flavors, different latency flavors, depending on like what the user's preferences are, what the gas fees are at the moment in the network. There's just a tremendous amount of complexity in all of these things. To be clear, none of these problems are intractable. Like, they're all by definition tractable problems. but the amount of developer tax it will create for developers to provide a good user experience will be very, very substantial.

By definition, that means developers will spend a pretty large percentage of their time and energy dealing with all of what I'll just call this, like, plumbing crap instead of actually building good user-facing applications. And so as I think about kind of long-term horizon development, I think that that's very concerning of just like developers are going to have to spend too much time thinking about this stuff. And so that's kind of the primary concern.

And so do you have an idea for how Ethereum could scale in a better fashion, or is it just simply that you think, it goes back to that scalability trilemma, like, you know, obviously Binance Smart Chain and Solana are more centralized, so is it just simply that you think at this point the best solution is just to have a more centralized chain and to compromise on decentralization? So I think there's, the skimba trilemma is basically not, not correct, for the most part. in degrees of correctness matter. So, like today, Ethereum, people will tell you

that runs on a 500-hour laptop. That's not true. Like, look at the gas limit, now I think it's $15 million, if I'm not mistaken, per block. You're like, that's not running on a 500-hour laptop. Like, it's just not going to happen. A $1,000 laptop is more realistic,

and that's probably generous. If you look at Salana today, Salon is running on, like, call it a $3,000 server, $3,500 server. What we're talking about here is, like, a three-to-four-x difference in price on, like, what hardware you need to do it. So let's be clear about what that, you know, just an absolute dollar term is what that means.

And it's not 20x difference or 50x difference. It's three to four. The second thing that matters is then to say, okay, obviously if the hard requirements are higher, by definition, there are fewer computers of a higher hardware, of the higher hardware standard, but like to what degree fewer computers? And then like, and then what's the diminishing marginal return of having, like, as you go from 1,000 nodes to 10,000 nodes, you get some marginal degree of censorship resistance. As you go from 10,000 nodes to 100,000 nodes, you are by,

definition getting less censorship distance. This explicitly has diminishing returns. And so when I look at, you know, people say like you're compromising on the trilemma, like it's like true in a very theoretical sense, but like in a practical sense, like, does it matter? And like to the degree like the hardware cost matters, it's like, okay, is it $3,000, is that the delta? Or is it like something else? The Bitcoin and the Ethereum communities both had very strong ideological beliefs on, you know, what's called hardware costs as like the primary constraint, which is fine. And like those beliefs are reasonable.

But like there was no godforsaken like reason to believe that those were like the right bounds to use. And I think it's actually quite important to test what those bounds should be. With the number is 4,000, whether number is 25,000, whether the number is 200,000. Probably shouldn't be 200,000. Probably shouldn't be 25,000. Below 4,000. It's like pretty, pretty great to me.

And it's not that clear to me that the answer has to be below 1,000. And, Kane, what are you make of what Kyle says? and his take on your tweetsworm? I mean, look, you know, I think broadly it's accurate, you know, and I don't disagree that there is going to be a lot of thrashing. I mean, we're in the middle of this right now, right? Like the synthetics project has spent upwards of, you know, 75% of its resources over the last six months working on scaling, right?

Now, you know, that's an investment that we decided was worthwhile making. and it's an investment that's going to pay off for the rest of the community because, you know, we're going to a lot of issues that other people then subsequently won't. Chain links doing the same thing with us. You know, there's a couple of other projects, Uniswap, etc., that are kind of taking the brunt of this work. But I don't think it goes away. And just to be clear, are you talking about working with optimism? You're working with optimism, yeah, to, you know, to get through optimistic roll-ups and get through the process of working out how to onboard from L1 to L2, you know, contract modifications, et cetera. So, you know, there is definitely a lot of overhead there. And that doesn't even

speak to what happens once it works, right? And once we have L1 and L2, and once we have multiple L2s, and, you know, all of the interactions, et cetera, like it is going to take up a lot of resources, I think. I suppose my view is that it's just by necessity a thing that's going to have to happen, right? You know, when SBF and I had our debate a year ago now or nine months ago, you know, one of the things we sort of talked about was this idea that, like, yes, maybe if everyone could converge on a single solution, you know, we could avoid fragmentation and avoid dealing with all these multiple layers and all that stuff. It's just not going to happen, right? Like, you know, as much as we might want that to be the case, it's just not going to. So, you know, we need to be realistic and accept that

there will be some level of fragmentation in this process. And it is going to be overhead for engineers and developers in space and people building the space. But I think it's kind of a necessary process that we need to go through. And then to the second point around sort of decentralization and what the threshold of hardware is, I think there was an interesting kind of thing that you slipped in there, which was a $3,500 server in a data center somewhere. That's not exactly the kind of expectation I think we have around,

like running an Ethereum node, right? Like a $1,000 laptop or $500 laptop, there are other requirements to run a Solana node that are maybe over and above commodity hardware, commodity access to data availability or whatever, that I think are pretty critical in order for that throughput to be achievable. And I think running everything inside a data center

or multiple data centers or whatever is like not just a quantitative change. I think it's a qualitative change. Like if I can't run, run a node in my house because, you know, my, my bandwidth is not sufficient in, you know, my cable motor or whatever. That puts a severe constraint on who can actually participate in the network, which I think is an important thing to note. Well, so let's now just talk about kind of the two main Eath killers of the latest vintage that everybody's been talking about. How would you guys

characterize how Binance Smart Chain and Solana have kind of filled the gap? that Ethereum is leaving with its high gas fees and, you know, its issues with scaling? I think, you know, Binet's smart chain has taken a very smart approach. Like everything that Binet's does is very smart. They're a very smart and efficient organization. It's just they may not be aligned with the Ethereum community, for example. And in fact, I mean, they're not, right? Like, you know, Binance is a company that is, you know, trying to maximize profit, right?

and they're very effective at it. And so I think that the finance smart chain traction that they're getting is not necessarily at the expense of Ethereum. I mean, I think it probably is pulling some liquidity away, but I think it's liquidity that right now is priced out realistically, right? There's obviously some additional incremental loss, but at the moment it's basically people that are priced out that are using finance smart chain.

But, you know, you can very quickly spin up the same code bases and clone stuff or make minor modifications to get it running on BSC. So it's just going to happen, right? It's just a realistic thing. And that's, you know, that's where I say, I think that the fact that Ethereum has taken longer to scale and we would have liked has created this market opportunity for someone to do that. The fact that finance are the smart people that are doing it, you know, it makes sense

that it would be finance, right? I think Solana is different in that it's much more of an existential threat to Ethereum. Because this question of wonky considerations for the, the average person around how decentralized is it, what, you know, what hard work can you run it on? What are the requirements, et cetera? The average person doesn't care that much, right? I think the average person, if they looked at Ethereum and Solana versus BSC, they'd probably say, like, yes, I understand that this is a fairly centralized network and it's run by a single entity, effectively, and they can make a distinction there. I think it's much harder for the average person to make

distinction between Ethereum and Salana. And so I think Solana is a much larger thing. threat to Ethereum and, you know, is something that the Ethereum community needs to be mindful of, that, you know, you can lose market share. Like, leaders fall behind all the time, in, especially, you know, in nascent phases of tech revolutions, right? It's very easy for someone to fall behind and we just need to keep ourselves accountable and make sure that we're aware of it. We can't just hand wave it away and say, oh, Salon is not, you know, a threat to Ethereum because of X, Y, Z, ideological view that we might have. I think it's really important. And just to go back earlier, when you were talking about how easy it is for developers to build on Binance Martian, it's because

it's Ethereum compatible. So it's literally like almost like a copy paste type thing. However, so it's fascinating that you say actually Salon is the bigger threat because Solana is not Ethereum virtual machine compatible. So why do you think that salon is the bigger threat? I mean, again, you know, I think it's that distinction between most people can differentiate between Ethereum and Binet Smart Chain. I don't know if most people can differentiate between Ethereum and Solana. I think also there's another barrier, which is, you know, if anyone can just copy, paste code from Ethereum to Binat Smart Chain, you get some interesting second order effects of, you know, things blowing up and rug pulls and all kinds of crazy stuff, right, which undermines that ecosystem. I think the barrier

to entry of having to actually write your own code in Solana means by definition you get better engineers, you get better teams, they're more credible teams, they're going to be able to take that code and develop it further. And it's just an ecosystem that's going to be much more competitive with Ethereum realistically. Oh, okay. So I see. So you're saying it's going to attract developers as opposed to like right now, Binance Smart Chain might just attract more users who are priced out of Ethereum, but maybe not so much developers. And that's why Salonas the bigger threat. Is that, is that it? Yeah, I think so. I think, you know, there is a filter in in Salana where, like, you genuinely can't just take, you know, solidity and drop it in and run it, right? Like,

you need to actually rewrite smart contracts from scratch. And that means you need to have a better understanding, not a perfect understanding necessarily. And there's definitely some clone projects on Salana that have kind of taken code and just ported it across. But, But I think that in general, it's not as easy, which means that you have a filter and you get better engineers and better teams. Okay. And Kyle, obviously, Kane and I covered a lot with that. So you can kind of respond to, well, no, I just, I was asking some follow-ups because I was curious. So go ahead and respond to whatever you'd like.

Yeah, so I agree with almost everything Kane just said. And as someone who obviously has spoken to a lot of Ethereum projects over the last 12 months and said, hey, do you want to pour to Solana? I've actually seen both ideological challenges and engineering challenges in getting them to do that. And like, you know, last, let's call it last September, October, I thought I was being successful

and I since realized I failed completely. Like, I think my hit rate was actually zero. Again, there's partly ideological reasons. And then, as Kane alluded to, it's actually more important as engineering reasons. One thing I've observed across the theorem community is these engineering teams who are all kind of oriented around solidity

and Solana is built on Rust. Rust is actually, in basically every way, actually a modern and better language. It's just intellectual and kind of tool chain firepower behind it because it's just an enormous kind of global thing. But most solidity devs don't know Rust and vice versa. I think it's been very logistically difficult for

Ethereum-based engineering organizations to figure out how to hire, grow, augment their teams and then kind of manage to, you know, side-by-side teams. I think it's just a logistically kind of difficult thing to do. So concur with everything Kane said there. The key thing that that kind of gets, Kane's comments about what kind of existential threat I think are accurate.

And I think this kind of all gets down to like the ideological beliefs around basically like what degree of weak subjectivity is sufficient in these systems. I would argue everything in the world basically is like weekly subjective. And what I mean by that is like the Bitcoin maximalist view is you need to be able to verify every single transaction from Genesis in 2009 all the way to today. And if you can't verify every single transaction yourself, then like the system is bad and evil. And that's like the purely objectivist view. but I think that's just an unnecessary bar to hold any of these systems too

because like your life is weekly subjective what do I mean by that well first like you read the history books and like you don't actually know what happened 500 years ago like it's just been like some guy wrote it down and that guy passed it on his kids and that guy passed it on his kids and like you don't actually know so like even like basic concepts like history right or by definition with these subjective but even on like on a more practical basis like I'm in a building right now the two of you are also in buildings right now like there is a roof over your head there architects that designed the building. And like, you're generally not worried the roof is going to

collapse and kill you. And like, you get in a car and, like, there's a bunch of a pistons firing and it's literally you get lighting cell on fire and it's exploding. And like, you generally don't care or think about it. And like, my point is you don't have to verify all of these things yourself. Right. So the world works on a weekly subjective basis where you don't need to verify everything. The question in my mind is what degree of, of subjectivity is okay for some sort of global permissionless financial system. And like one view is I have to be able to run my own node. And that and the dollar cost and let's say bandwidth requirements have to be below some threshold.

Let's say, I don't know, it's $1,000 and I don't know, 100 megabit for seconds or whatever. Pick your numbers. I think that's probably too restrictive. My intuition is that like as long as you can get to like the sum between 10,000 and 100,000 around the world, it's enough that all of the other seven billion people know that like those other people, are sufficiently honest and sufficiently well-intention. And remember, that's going to be organizations like Coinbase and like FTX. Like, there's going to be a ton of like well-known, you know, like reputable institutions

and not just like guys, you know, and on guys in their basement. And so as long as you have a sufficient number of them who are distributed around the world who all concur on the same consensus set, like what, what are you getting as you go from, let's say, 20,000 nodes to 2 million nodes? And that extra degree of censorship resistance and that extra degree of inclusion to me, well, I mean, I would love it to have it, the forced engineering tradeoffs it makes I find to be in terms of gas cost, in terms of latency, in terms of then all these other weird secondary effects on DevX and UX, I find that kind of to be the threshold for the tradeoff.

And so, yeah, it's an open question, but I think as Keynes alluding to, like that's kind of the existential open question. I think most people in crypto have taken it for granted that the answer to that question was like in this pretty narrow range. And I think Solana's open a lot of people's eyes and say, hey, maybe the range is a little bit wider of like what is actually the right answer. And that's kind of what we're seeing happen right now. So one thing that I want to explore a little more here is just, you know, how Binance Martina has actually gotten a lot more traction early on than Solana. Like it's just fascinating. Both of you, I think, view Solana as something that could really be more of an Ethereum killer than Binance Smart Chain. And yet,

you know, Solano really does not at the moment have the same kind of traction that even Binance Smart Chain does or, you know, has had at different times over the last few months. Like, you know, there was a period where, for instance, among the different automated market makers, pancake swap actually did have higher volume than Uniswap. Obviously, now with Uniswap v3, that's not the case. But can you just tell me kind of like how you see this playing out in the short term since it is at the moment, finance smart chain that has posed kind of more of a threat to Ethereum? I mean, my view, I guess, is that BSC is kind of an anomaly, right? It's a bit of a blip. There's a moment in time where Ethereum scaling has been slow enough and, you know, the amount of

activity that's been generated on the chain is. And I mean, I think, you know, this is one of the things that I think the point of that thread was about was that like we need to kind of not be so oblivious to these things, right? I think there are a lot of people in the area of community that thought, you know, L1 probably can handle most of the activity that we want for the foreseeable future. And yeah, it's important that we scale, but it's not like an existential threat. We're not going to get caught out. And we've been caught out. Like there's way too much activity to the point where there's an overflow of activity that should be on Ethereum that has just drifted off into this other chain, right? And that's just a missed opportunity, I think, for the Ethereum community completely.

Does that get pulled back in when you have roll-ups and, you know, things like Polygon and, you know, zero knowledge scaling solutions that are much sort of better and at scale? Yes. I think all of that activity that's happening in finance smart chain, to a large extent, the boss majority of it will come back. back over once, once, you know, the gas prices are low enough on these other solutions. I think where Solana differs is that, you know, again, it's going to be a harder road for them to scale and to get, you know, activity to come across because it's not just as easy to kind of, you know, port something across. You can't just do the pancake swap thing, right? Someone needs to build the pancake swap of Salana and it needs to be built from scratch in

rust and that's just harder to do. And it's just harder to kind of transfer that across. So I think, you know, my sense is that finance smart chain will maybe lose some relevance once we get scaling. Whereas Salana, I think once it gets momentum, it's going to be hard to unwind that because they're building a parallel ecosystem with different engineers, different skill sets, different, you know, approaches. And they have really taken, you know, to Carl's point, they've accepted that there is maybe a wider range of, you know, sensitive persistence, if you will, right, if that's where it kind of ultimately comes down to that is acceptable and that you can have, you know, fewer nodes and it's probably fine and the vast majority people don't care. As long as there's some people who care,

you know, people are going to, you know, sort of be happy to trust those people that do care as long as they know that there's sufficient number of them. And what is that number and what's sufficient. I didn't know that this was going to evolve, devolve into like an epistemological debate, but I think it's a good point, right? Like, there's not some answer, right, that the Ethereum community and Bitcoin community have, like, gotten right, necessarily, right? Like, we don't know what the market will bear. The market might be willing to bear much more because they're not as ideologically concerned as we are. The market might be very happy to have a much wider range of answers to that question. Kyle, did you want to add anything?

Yeah, I think the other thing I would add that I think is important to think about is stability and ability to project how things are going to work in the future. So like gas fees is like one obvious problem. And that's kind of the most salient one you see at the moment. But I would actually argue that that's not the biggest problem. The biggest problem is if you're going to be Twitter or you're going to be any bank or Nav or Reddit or whoever, it doesn't matter. pick your big company of choice, and you want to say, okay, we're going to like go embed crypto in a fundamental way into our application, right, whether it's with some social tokens or even embed BitCloud or some trading

whatever, I don't really care, something. And you have 100 million daily active users on your active, right? And you have 100 million today, and you reasonably expect you're going to grow over the next three years, you'll have 200 million users in three years or whatever. You have a very strong understanding of how the system work at the current moment. and actually, or more importantly, you need to understand

how you expect the underlying system to continue to evolve over the next two or three or four years at a minimum before you make any sort of large technical commitment like that. And the biggest challenge the Ethereum ecosystem faces actually today

is that it is actually impossible to answer the question. What does a scaled Ethereum application look like in 24 months? It's not that I don't know or that Kane doesn't know. It's that it's actually not possible to know because you have too many things

that are interfering with each other right now from these very optimistic oil up flavors, zero-nage players, and state channels. There's just too many things that are all about to run into each other, and no one knows how it's going to all play out. And so you just can't make any projections. You can be optimistic as I think it will get figured out, and that's a reasonable thing to believe. Some people believe it with higher probabilities than others, but you can't know with any degree

of certainty how does an application actually function on Ethereum at some level of scale in 24 months. It just is not possible to know. And I'm not sure when it will be possible. 24 may be 12, I think is pretty optimistic. 24 is reasonable, but it could be 36 months before that answer is really knowable. And being able to provide stability over a long horizon for large companies to, you know, commit to is extraordinarily important. Because when you have a large user base, the number one thing you can't do is just screw up your entire application.

I say the reason I'm actually most optimistic, Solana, is it provides. that stability in that like in terms of just how does it scale and then also in terms of just like the core development environment which is like it's based on the Rust community and it seems like rust is going to like slowly replace C++ plus as like powering

the guts of like everything in the world and the Linux like Linus Tarvel has recently said like they're going to start rewriting parts of the Linux kernel and Rust. And and so kind of that degree of technical depth and kind of integration into just all software around the world.

There's real deep important considerations here that's a lot of kind of naturally benefits from. All right. So we're going to talk a little bit about some very specific events over the next few years to see how this might play out. But first, a quick word from the sponsors who make this show possible. Today's episode is sponsored by EY blockchain. Ernst & Young is committed to supporting integration of the world's business ecosystems on the public Ethereum blockchain. Join our fifth annual blockchain summit and education series on May 18th to 21st for a deep dive into zero-knowledge privacy technologies, accounting, and tax rules, as well as the future of finance.

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Netflix, Spotify, and Amazon Prime subscriptions. There is no annual or monthly fees to worry about. Download the crypto.com app and get $25 when using the code Laura, L-A-U-R-A. The link is in the description. Back to my conversation with Kyle and Kane. So actually, one note before I asked my next question. Kyle, what you were saying about rest is interesting because, as you know, I've been working on this book. And what you were saying about it, replacing C++ reminds me of how Gavin Wood when he left the Ethereum Foundation and started a parody, they chose to make their next client in Rust. And his previous client had been a C++. So yes, I've, you know, heard a little bit about the benefits of that language.

I do see that there are developers who are going in that direction. So let's just now talk about all these different layer twos because you're right. Right now, Ethereum is in this somewhat messy period with a lot of fragmented layer two scaling and different projects on different layer twos. So for both of you, how do you see Ethereum best navigating this period while we have these other competitors that are able to already handle more transactions per second? I mean, maybe I'm being overly optimistic here. I think the period of highest friction is probably the next six months in terms of getting

some level of consensus about where we should be trying to scale Ethereum-based applications. I think one other consideration, though, to go back to what Kyle had said before, for a large organization is not just throughput. But that's not the only consideration. I think there is an important consideration, which is this idea of credible neutrality. And yes, Ethereum might be fairly opaque in terms of what the roadmap looks like and what something will look like in 24 months or three years. But I think that at the moment, even if you ignore maybe the fact that Salon is more centralized

from a node perspective, it's far more centralized from an organizational perspective. You know, there's a group of people sitting, you know, in a couple of places around the world that are kind of driving the majority of development. And I think Ethereum is in a very different place. And so if you're looking as a large organization that's trying to work out, you know, which platform do I believe it's going to be, you know, the best place for me to put resources into, I think we're already seeing that large scale, you know, particularly for financial applications, maybe less so for social things. in your Twitter and Reddit and things like that. But certainly, you know, from financial applications, Ethereum is the place that you go. You know, as long as you're not so concerned about throughput,

you know, if you're trying to put 100 million users on something that's probably not going to be viable, but when you're, you know, issuing a bond or something like that, you know, I think we're seeing that Ethereum, you know, they're not, you know, we don't have central banks issuing bonds on BSC, right, for various, you know, obvious reasons. And so I think that ultimately what it comes down to is, can we get to a level of scalability where we start to see some traction?

I don't think we're going to see Twitter fully decentralized itself in the near term anyway. But if we see some social applications that are running on roll-ups or zero-knowledge scaling solutions that are getting some level of traction, that will provide confidence, I suppose, in larger organizations to start to look into this. But it is going to be an incremental process. I don't think we just see a wholesale migration to any decentralized platform, whether it's Solano or Ethereum or BSA. Kyle, what do you think?

I agree with everything Kane said there. I think how does Ethereum kind of deal with this? I'm not sure what the answer that is. The problem with Ethereum is that it's not a thing or a group of people. It's a whole bunch of different people in a whole bunch of different places who disagree with each other on a whole bunch of different things. So I'm not sure what you can do about it. And the reality is that in the long run,

the experimentation going on now is necessary because you need to find the right sort of trade-offs, and it's not clear what the right set of trade-offs are. And experimentation is the way to figure that out. So, I mean, the best thing they can do is move as possible and try and play nice together as best as possible. I think the other thing that I really think about here is that, like, what happens when you have an application

that's like well-known, like consumer-grade application that's well-known that there's like 30 million or 50 million daily users. They're not like 500 million daily users, but like 30 or 50 kind of scale.

And what's the highest probability platform that that app, if you assume that application has to exist at some point, which I can actually, I assume 100% probability that such application will exist. If I didn't, then I wouldn't have the job that I have. Then like what's actually the highest probability

location of where that application ends up living? On the surface, the answer is obviously Ethereum. But actually, if you peel them back and think about it a little bit more, I would actually argue the only answer is slant. Because as Kane said, like the scaling is going to be incremental, which I agree with that statement. And so you've got all these people around the world looking crypto prices and experimenting with stuff and playing with things,

and they're all trying to figure out how to make stuff work. And if you just assume your default is I have to have support for the million users, then you kind of limits your choices really fast. And so if one of those things starts to work and reasonable near future and gets to a reasonable degree of, like, user scale. That's, like, why they recognize and understood. I think the relative perceptions will change really fast. The biggest surprise that actually multi-coin in the last nine months has been the price

of ETH BTC. We were convinced BTC was going to outperform EF this cycle because of the, we thought these big institutions coming in were going to be buying BTC and not buying EF. We thought they were going to be concerned about ETH2 and proof of stake. It's confusing and the monetary policy is undefined. And we really thought that that kind of degree of confusion was going to cause EPDC to go down. We were obviously dead wrong. BDC has way outperformed our expectations.

And so that's forced us to reconsider what are the marginal buyers caring about. And they seem to be undervaluing the digital goal thesis and overvaluing the productive utility asset thesis of things that are productive for large numbers of users that do useful things. And so if you kind of just lean into that even first, and say, okay, well, as this stuff evolves, how are those, you know, where are those dollars going to migrate over time? It just seems pretty logical to me that those dollars are going to migrate to where they see the 50 to 100 million daily active users. And I think the probability that that application ends up on Ethereum first is actually much lower than the market kind of assigns. Just looking at how our views have changed over the last nine months on EPPC,

I think the markets views can change on sold anything else as well. So something, you know, I just kind of need to pull together a bunch of different strands. here because I feel like some of the comments have gone one way and at other points a different way. But, you know, for instance, earlier, Kyle, when you were saying that you actually had not convinced any developers to move over to Solana, you know, despite all we're saying about the superiority of Rust and about, you know, how it's just Salon offers a better experience for developers and blah, blah, blah. Why do you think that you didn't convince any developers to go over there? And then yet, you know, it's just funny that you mentioned that at the same time that you're saying,

oh, like, you know, the next really big application for that size, you know, 30 to 50 million users, I think will be on Solana. So I'm just kind of curious to hear how you put all that together. Oh, sure. To synthesize that into like five words, the answer is on a global developer basis, solidity rounds to zero. Like, it really does. The number of solidity developers in the world rounds to zero among all developers. And so that's why it doesn't matter. And that's why we actually, the Salina team has stopped trying to.

to convince each developers to pour over. It just doesn't matter. Oh, I see. So since there are just... To be fair, and to be clear, I'm not saying that those eth developers don't matter as people are what their products they're working on. I'm just saying in the aggregate universe of total developers,

the number of slitted developers just doesn't matter. Okay. So then essentially for Salonah to take off, it needs to just pull in new developers who aren't currently in crypto or in, into blockchain anything. Is that? Yeah, or they're disenfranchised with ETH or they come from the rest community or, I mean, there's all kinds of weird way. Or they work at Binance or FTX or Coinbase. They work at or BlockFi,

whatever. They work at any of these places and they say, actually, best example here is probably Jump. Jump Capital. Right. Like Jump is the largest market maker. Jump trading. Yeah, jump trading. They're the largest market maker in all of crypto. They have the venture arm, which is capital and then trading is like the main org. Single largest market maker in all of crypto, and they're one of the largest trading firms in the world. They have 900 full-time employees. And they're deep in crypto, and they're trading on DeFi. They're trading on every single centralized exchange around the world.

And they're saying, like, okay, we think we can build a big part of the future. They're new Oracle number called Pith that they announced. And, like, jump obviously trades on all these assets on all these venues around the world. Obviously, they're going to pipe in a bunch of the data that they're trading from these other places into slana. Right. And so you just look at people like that and it just makes you wonder, Like, where does that thread go? Like, it's a very interesting.

Maybe a counterpoint. Look, I love the jump guys. And, you know, I talk to them regularly. I think they're an amazing company and they do a really good job and they're amazing market makers. But I think what's interesting is they still have a very trad-fi DNA, right? Like, they don't quite get everything defy. There is an aspect of like understanding it from an ideological perspective.

So, you know, when we were talking about this Oracle network that they were going to launch, one of my concerns with this is that they are looking at it from a very different perspective. And maybe that's fine, right? And the tradeoffs and optimizations they're trying to make are coming from a very different angle of like a tradfai centralized angle and not quite rocking maybe what the tradeoffs are that need to exist for a smart contract developers is to want to adopt something. So I think jump is actually a really great example of how someone can maybe get it wrong and go, okay, we're over-optimizing for throughput here.

These guys are in HFT. They're like the throughput to them is like they can't get, you know, they're addicted to it, right? They can't get themselves out of that mindset. And so I think that the fact that, you know, the siren song of Solana attracted jump is kind of indicative of one of the dangers of maybe. be not having that deep understanding of what the tradeoffs are in decentralized finance that the solidity engineers who've been working, you know, there for the last four years have,

like, deeply ingrained. Like, we understand how these things work and we understand why they work that way. We did all the dumb things two years ago, three years ago, four years ago, and we've learned our lessons. Someone who's coming, you know, from a very centralized tried-fired perspective is maybe not going to have that understanding and may optimize for the wrong things. And I think in the case of Jump and this Oracle network on Solana, I think they kind of have. I think they would have been better off building something and integrating with existing systems in the Ethereum network, like Chainlink, for example.

They're going to hate me for saying this. But I honestly think that they would have added more value there, you know, had they done that. But that's my opinion. And I've told them that myself. But I think it's a really good example. Kyle, what do you have to say? There's open questions that like we have, sometimes we iterate on these. internally, sometimes it kind of pours out on Twitter of like, what exactly makes DeFi

different than CFI? And like, what are actually the properties that matter that are different? That's kind of the crux of what Cain's getting at. And like, there's a few obvious ones and there's a few that are maybe more debatable. So, like, the most important ones are obviously non-custodial, like probably the single most important one. The fact that you can have contracts hold assets instead of people or organizations is, you know, like kind of paramounts of this whole thing. the fact that it's transparent is probably super important in up there. The fact that you can kind of trivially re-hypothicate collateral between systems is really important. Beyond that, it's not clear to me that there's any actual differences between defy and C-Fi on a strictly financial basis.

There's obviously engineering differences, especially as it pertains to distributed networks versus central databases. But on like a strictly financial basis, I think there's the only properties that matter. differ. And so if that's the case, then it's not clear to me why I think jump is doing is wrong. But there's maybe an argument that I'm myopic and missing some things. And there's some other stuff that that are considered. Yeah. You know, I don't think that you're strictly missing something, but I think it's it's kind of a question of like, what are you optimizing for, right? And I think someone coming from C-Fi or coming from Trad-Fi just has a mindset of what they're optimizing for. They're optimizing for throughput. They're not necessarily factoring in the social

consensus aspects of these things, right? And maybe that doesn't matter, but it seems to matter in D-Fi. Like, there is a component of that that is important to factor in. Like, why do people trust something? You know, is it, like, genuinely, credibly neutral? Like, you know, are we concerned that it's controlled by single entity? It's all of these considerations, I think, come in to, you know, what's going on here, right? And I say this as someone who launched a project that was extremely centralized in the early phases and, you know, the Ethereum community was, was very vocal about how terrible that was and what a bad person I was for doing that. But, you know, we obviously had a plan to decentralize over time, right? When you have something that's coming from a very

sort of centralized place without maybe a plan to kind of decentralize over time, there's going to be some questions about, is this a place that I want to commit resources to? Because you end up with a situation of platform risk. And I think Ethereum has platform risk, but it's a different type of platform risk than, say, like, Facebook. Yeah. I actually also now just want to ask a little bit about defy composability, because that was something that obviously at a certain point was a concern. But now that we have all this fragmentation anyway on these different layer to use, they just wonder, does that make it less of a factor than it used to be and make room for these competitors to gain market share?

I mean, Solana certainly the fact that it's not, you know, taking the same sort of approach to scaling and having all these multiple layer twos, I think we'll have an advantage in composability, like just by definition, right? You know, if we've got four different credible choices that a defy

team on Ethereum can choose, right, between like Arbitrum, optimism, you know, polygon or, you know, stockware or whatever, you've got these, it just makes it hard, right? We could have a situation where four of the top DFI projects all end up on different networks. So that's just something that I think we need to be aware of. Whereas Salana, you deploy on Salana, you're there.

That's it. You're all in the same place. In my conversations with traditional finance people, and I imagine a lot of Keynes he's had in the last few years as well, one of the coolest things is they see the composability and they're like, oh, that, like, delightful clicks very quickly. And so I think it's a pretty important thing to them. They tend to understand relatively quickly that this is one of those step function improvements, the new system enabled for the old system not do.

And it's certainly, I'd say, intellectually the coolest of them, and certainly the most kind of developer-centric also of them of kind of those native new D5 properties. And Salon clearly preserves those the best. And so I think there's going to be a real group of people who are drawn. to that. I think for the most part, the world is not fully appreciate the degree to which these things are true at the moment. But as Ethereum kind of continues to become more heterogeneous across layer one's sidechains and layer twos, and as Solana just maintains everything organically working in like a single composable shard, that will become a lot more obvious to the world in 6012

months time than it is today. Today it's kind of mostly just people like us theorizing. That would be very obvious. And I suspect a fair number of people will be drawn to that. because they will perceive it as the right thing to optimize for. And it is a reasonable thing to want to optimize for. So do you think then we could see kind of like defy moving to Slana? So my next question for you was about, you know, obviously we've seen these NFTs taking off in the last several months. And both Slana and Binance Smart Chain are creating their own NFT platforms. And so then I started wondering, oh, like, are we just going to see different parts of the crypto ecosystem on each of these

different chains, you know, like maybe defy moves to Solano or or it grows its own kind of organic defy community that is more composable than defy and Ethereum is right now or something. Like how do you think that kind of these more niche interests in crypto will affect this competition? I don't think Ethereum, where it is today, will be displaced in any meaningful way, in any foreseeable time horizon. But even for like any particular use case? Well, I mean, the use case is just whales. Like, that's just already true.

The retail dollars have peeled off to Polygon and BSC. I think the bigger question is, where do you onboard net new users into the system? And specifically, you can argue that even the major crypto companies, Binance, Coinbase, FTX, whatever, they all have some degree of ID log ideology built in the DNA to companies based on, like, the founders and like the VP's a product and whatever. Like, like, everyone here owns a bunch of crypto, you know, at, you know, at, outside the job, and, like, they all have ideological beliefs about X and Y and Z. But, like, the people who work at, like, I don't know, let's just say Revolut, for example, or whatever, are, like, and New Bank in Brazil, like, those people for the most part when they look at crypto, like, their ideological beliefs are, like, 10x is not 100x lower than the people who work at Coinbase and Binance and FCX. And so they really don't care about all the stuff that we like spend our time thinking about.

And so they're just going to be looking at like, okay, well, like, where can I bring the users to get, okay, I want like a defy, you know, money market. And I want some loans and I want over collateralization and I want these risk parameters and I want some USDZ and USDT. And like, okay, where do I get? And like, oh, great, so on it. Okay, they're just going to not care. I think extremely rational for actually, I think the substantial majority of the world, the world. its companies as they look at crypto to kind of adopt that view. Kane, do you have an opinion?

I've said this before on Twitter. I think the demand, probably in some Solana thread where people were annoyed by something I said, but the demand for decentralization doesn't come from users, right? Like users don't care. They just want to consume something that has some benefit to them, right? I think the demand comes from the engineers who, you know, have a belief that, not just that they're ideologically aligned with the network, but that there is some practical benefit to being decentralized, right?

And that being more decentralized has more benefits, right? But there has to be some practical benefit. If there isn't, like my thesis on Ethereum is that, like, being on Ethereum will over the long term be better, that there will be practical advantages to being on Ethereum because of the way that it's constructed. And if that's not true, then yes, of course, people are just going to go to BSC or Solano or whatever.

So, you know, when Revolut or, you know, or a bank or like some fintech looks at which are the platforms we can deploy on, my genuine hope is that the practical benefits that I believe that Ethereum has will be obvious there. You know, why are you going on here versus going on BSC, right? I think for Ethereum versus BSC, you know, we can kind of laugh about it because it's pretty obvious what the benefits are. Like, you know, I could just run my own database if I'm Revolute. I already have that, right?

So, you know, it's kind of obvious that you don't go to BSC, but I think it's less obvious for Solana. And I think that's the concern, I guess, that I have to bring it back to, you know, the initial, the kind of starting point that, like, if the practical benefits of being more decentralized are not 10x better or at least 5x better or something, then, yeah, we could just see people, you know, going to a network that, you know, maybe makes that trade off, you know, a little less harshly than Ethereum. does. So a couple things. First, you know, I really was expecting you guys to disagree more. So

it does surprise me how much you are agreeing. We're both eat whales. So like, you know, it can't be, it can't be too bad, right? We can't hate each other. Okay. Well, Kane, out of curiosity, I mean, it just sounds like you would never build on Solana, even as you talk about what the benefits would be to building there. So why is that? Like, ultimately, what it comes down to is I don't just have an ideological alignment to Ethereum. I've got a financial alignment, right? Like, I, you know, I've got a big bag of Eith and I'm, I'm here to make Eith as successful as I can. Right. So, and this is, I think, the interesting thing about, you know, when you talk about someone at Coinbase versus someone of Revolut, right? Like, you know, someone at Revolute probably doesn't have a bunch of equity in,

like, Microsoft and isn't like in Revolut advocating for, like, adopting, you know, Microsoft. Like, it's just not, it's a weird thing in crypto where, like, you have this. weird financial alignment of all these different players in the ecosystem. I don't know if it's good or bad. It's just a thing that exists, right? And so, you know, for me, I advocate for Ethereum because I'm both ideologically and financially aligned with it, which also comes back to, you know, an earlier point around. I think that's why I'm pushing so hard for us to converge on optimism as the scaling solution, because I think if we have a canonical L2 solution that is like, you know, the consensus solution, it will be much easier for us to compete with Solana over the next six to

12 months, right? If we don't, and it is super fragmented and there's no understanding of where I should go, what I should do, or which place I should be deploying to, I think it'll erode the value prop of Ethereum much more. So that's why I'm so aggressive about advocating for like we all need to get on optimism. And even if it's not the perfect solution, it's the best solution that we have and it's better that we all converge on something, which is not too dissimilar to SBF's argument of why we should all go to Solana, interestingly, right? So I think we're kind of in the same camp there, I guess,

just with different conclusions. One thing I will say is, you know, I think however much you advocate that everybody get an optimism, like that boat has already sailed, you know, already there's a fragmentation. So let's talk about EIP 1559. most likely we'll make ETH deflationary, and that could actually, obviously, give some adrenaline to the price. So do you think that would then change this dynamic that we're seeing where these other chains are taking market share?

Because, Kane, as you pointed out, you know, you're financially aligned to Ethereum, but obviously, B&B and SOL have really shot up this year. You know, they had lower prices. And so it's easier to get that big jump. So once we see EIP-1559 go through, do you think that then that could change that dynamic? I think it makes it worse, actually, right? Like, I think the price appreciation. Yeah, no, it's the price appreciation of the and the starting point that, you know,

that most people got in, it really makes it hard for that wealth effect to kind of spread. Right. Like if you think about the average person that comes into crypto and they want to maybe deploy 10 grand of capital, right, which would be pretty high. But let's say they get 40. Right. Now, unit bias is a dumb thing, right? Like if you believe that Ethereum is going to appreciate on a percentage basis, more so than

Solano or BSC and you're just purely looking for, you know, capital appreciation, then you should buy those 40E. But there is an element of people want some level of meaningful ownership, right? And if I turn up and I can get much more meaningful ownership of something like Solano or BSC, it's not just unit bias. There's other factors there where people feel like they just don't have a decent stake

of the network, right? And so I think that that wealth effect that has really, you know, kind of accelerated for BSC and Solana is quite powerful in terms of locking people in. How distributed is it? And how widely does that go? I don't know the answer to that.

But I do think if ETH continues to appreciate and you get to a point where, you know, ETH is 10 grand or 20 grand or something like that, It actually makes it harder for someone new to the space to come in. How good do you feel about owning Haphani with your 10 grand or something like that? Like how aligned do you feel to the network if you've got 200 millionth of the network or something like that? It maybe just doesn't it doesn't psychologically feel that good. So I think that's something that I worry about is price appreciation could have a negative effect.

The flip side is things like Polygon. And, you know, Arbitrum will obviously launch a token. I'd say, you know, optimism will. will pretty obviously launch a token. So when these new layer two tokens launch, I think that that will provide an opportunity for people to feel like they're getting in early at a lower price point, lower network value

and that they can get alignment with, even if they missed the E-Train or boat or whatever analogy you want to use, that they'll be able to get some alignment with these layer two tokens. And I think we're seeing that with Polygon. Kyle, what do you think? I think the 1559 narrative

is extraordinarily bullish EFs over the next minimum six months, probably 12. There's never really been an asset on the world that has a credible claim on negative issuance. A lot of people will find that very appealing and very intellectually interesting. And then combined, it's got these cool D-Fi things happening

and then move to proof of stake. Like, there's that kind of, you know, six-to-12-month horizon for Eith looks very, very good, which is why we're long-eathe. The problem, as Cain alluded to, as the price of ETH U.S.D goes up, Ethereum becomes more expensive to use. And like even arbitram and optimism,

I don't think will be cheap to use. They will obviously be cheaper, a lot cheaper, than the ETH main net is now. But assuming there's no subsidies, I think you'll still be, you know, $2, $3, $4, $5 transactions. Transactions are not going to be one penny or two pennies. Look, again, $2 transactions are manageable for most people.

But like for the people who are putting in $100, like that's still not reasonable. People who are putting in, you know, $1,000, they can live with it. But for actually the long tail of retail, it just doesn't work. It just doesn't work. There's just like a big logistical challenge. And 1559 will short term feel very good. But like medium term could be problematic, as Kane alluded to. So, Kane, when you wrote your original tweet storm, you might have seen Ryan Zer,

formerly of Polly Chain Capital and the Web3 Foundation. tweeted back at you, recommending that you reconsider the quote, us versus them mentality of maximalism and consider making synthetics cross-chain. And then he was like, single-chain apps are going to get dusted. It is programmed. So would you ever consider making synthetics cross-chain? And why or why not? So I think I have like three draft responses to that.

And I just kept not publishing them. Maybe one of them was like a bit too aggressive. And I was like, I'm just not going to go there. I really like Brian. So I was like, I got enough people that I have debates with on Twitter. I don't need to make another Twitter enemy. But his point broadly is true, right? Like, I think that, you know, the Ethereum community spends a lot of time talking about, you know, BTC Maxis

and how ridiculous a position it is, right? We need to be very careful to not fall prey to the same kind of thinking, right? where we just assume that our position is true by default and never challenge it. I mean, that was part of what that thread was about, that we should be challenging our assumptions and saying, like, is there something we're missing here? The market is sending us a signal. We can't just bury our head in the sand and say, no, the market's wrong. We're right.

That's just not the right way to approach this problem. If the market's making bad decisions for the wrong reasons, on some level, we've still failed because we haven't given the market the information to make the right decisions for the right reasons, it's a communications issue. But regardless of what the reason is, the market is doing something that we don't think is a good idea. So we're wrong, right? Like just by definition, right? And we need to work out how to fix that problem. So I think Ryan is right to come back to like, would we look at cross-chain? I mean, we looked at running on EOS in 2018, right? Like we, you know, we were genuinely considering that. We ended up deciding not to do that and doubling

down on Ethereum and I think that was the right call. But synthetics has very specific challenges around running cross-chain. The interesting thing is going from L1 to L2 and running across both chains will make that problem a lot less hard in the future. And we will be able to support other chains much more easily because all the infrastructure will be there. I would imagine most likely it would be other roll-ups, whether they be ZK or other optimistic roll-ups, be the more likely adjacent place that we would deploy. For the reason that, you know, Kyle sort of mentioned as well, like, we don't have the infrastructure to spin up a Rust team to go and, you know, rebuild all of our contracts

and deploy on Solana. And that would be very challenging. We could do it. You can do anything. But it would be a lot of resources to throw at something like that. So I think it's going to be much more likely that EVM compatible chains will be where we go in the short term. But we're not ruling anything out.

You know, we try not to be. And I should also say, like, when I say we, there's a community that. decides this stuff. Like, I don't decide it. I'm just someone who says things on Twitter, like at this point, right? So, you know, like personally, even if I said, we'll never do it, I can't guarantee that that doesn't happen. You know, the community could say, actually, this guy's an idiot. Let's go on Solana tomorrow. Yeah, I think you're a Twitter bio right now says former benevolent dictator of synthetics. Is that what is that? It's true. Yeah, it's true. Yeah. So in the same vein of my previous question, I was just,

wondering, so obviously, you know, we have this Thor chain that now makes it easy to swap between different chains. And so if we're starting to see things like that, then does that make this question that we've been discussing in this episode moot? Meaning, you know, will we eventually just see users seamlessly going to different chains rather than staying in specific ecosystems? And if so, then will that just kind of make this multi-chain world that kind of grows the pie for everyone? And it, you know, it's like Ethereum will get bigger, Solana will get bigger, BSE will get bigger, et cetera. And it's not going to be kind of this little, you know,

like tribal, tribal view of crypto. Yeah, I have some non-contentious views on this question. So one of the common things you see is people talk about, like, you know, back in the day, like, make an early internet in software days, like making standards work together. And there was competing standards and those people got together and then tried to make inter-operation standards. And there's a whole ton of history of this happening at many different layers of the stack for like networking pieces of the stack through like kernel pieces all the way through like the browser and HTML and all this stuff. Kind of a recurring theme in the history of software.

And the biggest takeaway from kind of seeing that history play out many times across many layers of the stack is that the answer is always interoperability and that it's not one size of it's all. and things kind of evolved to deal with backwards compatibility, basically. Like different things evolve at different speeds, and then everyone has to realize that they have to play nice, and they all have to talk to each other later on. And a lot of people have used that historical framework to say, they were therefore with very high probability. The future must be multi-chain for that kind of same basic reason.

I think that's wrong-ish. It is obviously right-ish today. And if you look at our portfolio, we're big north-chain position, big slot a position, big-eat position. Like we're, obviously, money says that we believe that's happening. And I think with basically 100% probability that will continue to accelerate. The world will become more heterogeneous, both within Ethereum and outside of Ethereum,

over the next minimum 12 months and probably 24 to 36. But like, there are real costs to having multiple chains. And those costs are not just like developer, the devX costs or like standard organizations cost. It's actually user cost in terms of gas and the form of latency. The moment you do anything cross-chain, you guarantee are increasing gas costs and you are guaranteed increasing latency costs. And those two dynamics did not exist for all kind of previous iterations of these types of like what I'll call interoperability kind of standard status, at least not in such an explicit way, where the cost is not measured in billions of a penny

but where the cost is measured in like dollars. That's a really, really big difference. And so being able to stay synchronous, being able to stay composable, I think is a lot more important than the kind of historical perspective would lend you to believe. So that was my long rant. I'll end it there. Kane, do you have an opinion? And broadly I agree, right? Like, I think, yeah, I think there's a reason why we're not talking about cosmos, for example, right? And there's a reason why we're not, maybe, maybe it's a bit unfair to Pocod, right, I think.

But still, like, you know, this kind of architectural decision of creating all of these little zones and having them all talk to each other. I just don't know how sort of credible that is as a long-term solution, right? That's why, that's why, again, I think Salana, you know, going down this path of making tradeoffs that, you know, ensure composability. for the longer term versus, you know, things like sharding and, you know, various optimistic roll-ups in different flavors, you know, competing with one another. I think it's, it has the best chance of unseating Ethereum, right? Like, it's the thing that concerns me the most, right? Because it's a good pathway. And, you know, when you get to start from scratch three years after someone else has done a whole bunch of dumb things, right, you can learn lessons from that and you can make

optimizations and improvements, right? It's just a reality, right? Like, you know, we're still very early. Like, we don't have enough traction and momentum as an entire ecosystem to say that, you know, any one particular thing is going to work and continue to exist, right? So that doesn't mean that I don't think Ethereum can fix some of the issues. And, you know, I think some of the tradeoffs that it makes are the right tradeoffs. I know they're challenging. But I do think that ultimately, we will probably converge on a network that people will use because of that composable factor, right? I don't think we're going to have these weird zones.

And I think there'll be a way to kind of, you know, aggregate them all seamlessly, you know, potentially like we've seen in the AMM space in DFI where you get these aggregator layers sitting on top, but they have to be in the same place for that aggregation to work. Right. It's really hard to aggregate across these different zones because they're. the cost and latency that it introduces and the lack of composability. So I just think that we will end up in a situation where, you know, most things, the vast majority of liquidity, you know, it won't be winner-take-all, but it'll be

winner-take-all, but it'll be winner-take most. And most of the liquidity will end up in a single place, and that would be the place where people go. My hope is that that's an optimistic role-up on Ethereum, but I can see a world where that's not the case as well. Interesting. Yeah. Speaking of the aggregators, I did notice.

you know, one inch is on finance smart chain, but I don't believe it's on Solana. So that's kind of interesting, given everything that we've said so far. Well, we're well over time, but there were just kind of a number of different topics I wanted to hit. So I just wanted to make sure to ask questions about those items. Where can people learn more about each of you and your work?

Yeah, so it's easy to find me on Twitter. My Twitter handle is just my name. So it's at Kyle Simani. and then Multicoin as a blog. We publish stuff every now and again. Our website is multi-coin.competal. For me, Twitter, mainly. My handle is K-A-I-Y-N-N-E.

And I published stuff on the Synthetics Blog as well, predominantly. So that's blog. Dot synthetics.io. All right. Great. Well, thank you both so much for coming on Unchained. Yeah, that was really fun. Hey, Laura, this was fun. I'm glad we got to explore all these really subtle issues.

All right, well, we'll see how this all plays out, and maybe I will have you guys back and we can do the throwdown at that point. Okay. All right, everyone, thank you so much for joining us today to learn more about cane and synthetics and to learn about Kyle and Multi-Coin. Check out the show notes for this episode. Sign up for my email newsletter where you can learn how to make pre-orders for my book, The Cryptopians, Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Crays. you can sign up right on Unchainedpodcast.com. Unchained is produced by me, Laura Shin, with all from Anthony U, Daniel Ness, and Mark Murdoch. Thanks for listening.