Unchained - Ready Layer One: Who Competes With Ethereum? - Ep.174

Episode Date: May 26, 2020

This week’s Unchained is my panel at Ready Layer One! We talk everything layer one with four key players and projects -- Illia Polosukhin of NEARprotocol, Zaki Manian of Cosmos, Rob Habermeier of Polkadot, and Arthur Breitman of Tezos — to find out how these projects plan to compete with Ethereum and attract developers and users. We discuss:  What platforms they are building and at which stage in development they are  How they differentiate themselves from Ethereum, and what problems they believe need to be solved  How they plan to attract devs in an industry of network effects  Whether or not Bitcoin and Ethereum are direct competitors Whether, in the long run, crypto will be more winner-take-all or there will be multiple, interoperable chains   How they plan to bring new users into the space How they think the transition to ETH2.0 will shake up the existing blockchain space Take our survey! Tell us what would you like to see from Unchained! Please take a moment to fill out the survey to let us know what you'd like from the show: surveymonkey.com/r/unchained2020. Crypto.com has offered our survey respondents a chance to win a metal MCO Visa card -- and Crypto.com will stake these cards indefinitely! Ten lucky winners will enjoy card benefits including free Spotify, free Netflix and 3% back on all spending, and they’ll earn extra interest on their crypto deposit and more!  Thanks, Crypto.com! Again, take the survey now: surveymonkey.com/r/unchained2020. Unchained is hiring! Come work at Unchained! We have an opening for a remote editorial assistant — find out more about the gig and apply here: https://unchainedpodcast.com/seeking-remote-editorial-assistant/ Thank you to our sponsors!  Crypto.com: https://crypto.com/ Kraken: https://www.kraken.com Stellar: https://www.stellar.org/ Episode links:  Illia Polosukhin: https://twitter.com/ilblackdragon Near protocol: https://near.org Zaki Manian: https://twitter.com/zmanian Cosmos: https://cosmos.network Rob Habermeier: https://twitter.com/rphmeier Polkadot: https://polkadot.network Arthur Breitman: https://twitter.com/ArthurB Tezos: https://tezos.com Near protocol on mainnet: https://near.org/blog/near-mainnet-genesis/ Electric Capital report on the number of developers in Ethereum: https://unchainedpodcast.com/electric-capital-on-the-coins-punching-below-their-weight/ 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. Before we begin, a couple notes. First, I'm doing another survey to find out what you want from the podcasts and how I can make them better. Last year, we heard you loud and clear on the news front and so have begun including a weekly news recap at the end of every unconfirmed. This year, what would you like to see from Unchained? Please take a moment to fill out the survey to let us know what you'd like from the show. The link is in the show. The link is in the show. show notes, or you can just go to surveymonkey.com slash R slash unchained 2020. Again, that's surveymonkey.com slash R slash unchanged 2020. And guess what? Crypto.com has offered our survey respondents a chance to win a metal MCO visa card. And crypto.com will stake these cards indefinitely. Ten lucky winners will enjoy card benefits, including free Spotify, free Netflix, and 3% back on all spending, and they'll earn extra interest on their crypto deposit and more. Thanks, crypto.com. Again, take the survey now. Surveymonkey.com slash R slash Unchained 2020. That's surveymonkey.com slash R slash Unchained 2020. One other thing, Unchained is hiring. I'm looking for a remote

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We discussed how these layer one chains plan to take on Ethereum, not just with features, but in terms of attracting developers and users. Plus, we get into a big discussion over whether or not Bitcoin and Ethereum are direct competitors. It was a lively, fun discussion, and I definitely noticed that the viewers thought so too from looking at their comments. enjoy the stellar network connects your business to the global financial infrastructure whether you're looking to power a payment application or issue digital assets like stable coins or digital dollars stellar is easy to learn and fast to implement start your journey today at unchained dot stellar Cracken is the best exchange in the world for buying and selling digital assets. It has the tightest security, deep liquidity, and a great fee structure with no minimum or hidden fees. Whether you're

looking for a simple fiat on-ramp or futures trading, Cracken is the place for you. In response to the challenging times, Crypto.com is waiving the 3.5% credit card fee for all crypto purchases for the next three months. Download the crypto.com app today. Welcome everyone to our panel, where we've got a number of founders of layer one protocols, which I believe a year ago, maybe we were calling them Ethereum killers, but I don't know if that's the term nowadays. Anyway, why don't we just have each of you just go around and say what it is that you're working on and where you're sheltering in place from? Hi, I'm Zaki. I'm sheltering in place in Palo Alto, working on Cosmos. I'm just working on launching IBC right now.

Hi, my name's Rob. I work on Pocodot, which is a heterogeneous sharding platform. I am hunkering down in the DMV in the DC area. Hey, everyone. Amelia, co-founder at NIR, working on pretty much we just released Mainnet and like stage one. and then kind of going to decentralize it over this months and beyond, actually in Shanghai, in China. Hi, my name is Arthur Brighman. I'm a co-founder of Tezos. China has been in life for a bit of her almost two years now, and I'm sheltering in place in Singapore. Great. Well, thank you all for joining.

So I actually wanted then all of us to also just give everybody kind of an overview of what did it like why we you know brought you all together so um why don't you each now just say what it is that your protocol does and kind of where in the stage of development you're at cool um i can go first so cosmos um so cosmos is a software stack for building your own blockchain and so the cosmos hub um and a number of other blockchains like the binance dex chain uh iris net kava terra have all been live on this software stack for about a year. But sort of the two pieces of this sort of vision of Cosmos, one piece was this idea of, you know, build your own blockchain.

You know, everyone can have their own sort of customized, community-driven layer one. And then the second piece was interoperating those blockchains. So in the year since we launched, since a bunch of these networks started to launch, we've been working on this interoperability framework. called IBC. And right now we're in the midst of Game of Zones, which is the sort of incentivized test net, sort of inspired by Game of Stakes, which was sort of the original incentivized test net,

that we're sort of putting IBC through its paces, expecting to launch IBC on the Cosmosub later this summer. Robert? Yeah, so I view that there's a design space of blockchain scalability. So what Pocodot does is it, It occupies a space, a point in this design space that's in between something like homogeneous sharding, where you have a bunch of different shards that all execute the same kind of smart contracts and things, and in between something like Cosmos, where you have a bunch of different blockchains that all talk to each other.

Each of those blockchains has to be fully sovereign. So there are tradeoffs to both sides of that design space, so we try to occupy a middle ground where those shards are heterogeneous. We have a bunch of different shards. We split up the work between a bunch of different blockchains that draw security from the same source. But those blockchains are specialized to specific tasks. They don't have to bring their own balances. They don't have to bring their own validator sets, things like that. So as any engineer knows, the closer you can specialize to a specific task, the better your solution is going to be.

More general solutions are less efficient. So that's our notion of parochains. So we also embody this notion of build your own blockchain. bring your own blockchain. We built a toolkit called Substrate, which is for building your own blockchains, writing what we call the runtime, the logic of your blockchain in WebAssembly, in RustCode,

and everything else is sort of taken care of. We eat our own dog food in the sense that we've written Pocod using Substrate as well. So we've launched the Kusama network, which is it's essentially Pocodot, but it isn't Pocod. So it's a, incentivized real value-bearing network for sort of putting through our thesis through the hoops.

And we're working on deploying the initial implementations of parochains over the next few months. I know you also have some news. Yeah. So as Rob mentioned, there's kind of a spectrum. So we're on the other side of spectrum from Cosmos, where we're on the other side of spectrum from cosmos where we see the world as kind of developers might want specialized solutions, but in very rare cases. And instead, they kind of want speed and ability to go to market if they're actually

building a business faster. Hence, like, we actually, we think of NIR as developer platform really targeting kind of people building applications and not needing to think how infrastructure Chinese works, right? Kind of same motors that like AWS been able to build a huge business around. At the same time, like to actually be able to serve this developers, you do need a scalable platform. You do need to solve a lot of kind of technical challenges. So that's what kind of infrastructure that we're building with near protocol is, is a chartered protocol. It runs WebAssembly. It kind of provides all this tooling around it. And yeah, like yesterday,

as we mentioned in the opening talks, we just kind of opened up our main net. It is a proof of authority right now, but the point is that it allows people to start building applications and actually getting initial users. And then throughout May and June, we're going to be decentralizing, bringing more validators on board, and over time, kind of releasing it to the community.

Arthur? I think if you think of these networks and platforms merely as technology, you're missing the forest for the trees. What these things are primarily is they are communities. They are, I would say the closest thing to them are polities. They are essentially political organization. And the backbone of that usually is a blockchain. It's a good way to do it.

It's just one way. And what we're trying to do with Tesos is ensures that this, you know, you can preserve that community. you can preserve that network while being somewhat agnostic to the technology. And the way you can do that is by having technology which can evolve. So if you're looking purely as, you know, obviously software and development are very important. You cannot go anywhere. If you don't have good engineering, if you don't have good software.

But I would say that it's, you know, it's not the end. It's not the end goal. These things are not operating systems. They are fundamentally political entities. And what Tilos does is essentially trying to really tackle on that idea. directly by introducing means of control by the community of the platform and how it evolves. And so Taylor has been, you know, it's been in a test net for many years now. It was in a main net for almost two years.

And it's already been through three protocol upgrades. There are proposals for a force one coming. And so you can't define it as. as a piece of technology itself because the technology can change. And so, you know, anything we can discuss in terms of like sharding, in terms of like interoperability, all of these fundamentals are technologies, but they're not, they're not communities. And I think that's a focus specifically of those. Yeah, well, let's talk a little bit more about that because, you know,

I kind of made that joke at the beginning about the Ethereum killers, which is sort of like this just catch-all phrase that was used for a lot of protocols that are sort of working in the same area that all of you are. But I'm sure, you know, even just like listening to each of you describe what you're working on, obviously, there's a lot more nuance. And yet at the same time, we are in this reality where kind of like the most used blockchain in this space is Ethereum. So I was curious to know how you differentiate yourself from Ethereum, you know, what problems you believe still need to be solved in the space and what you guys are working on. And anybody can I know we've been going in this little clock white circle, but it can go in any direction.

I'm happy to start. You know, I was, one thing I was reading about near, which I thought was completely on point. And I don't know how, like, how relevant it is today, but it was a statement saying, like, look, we've been working on sharding and, like, having this, like, super high skillability. And then we realize, hey, there's no point in building. Like, it's like building this giant building in a desert, you know. And so I would say, by and large, you know, it might seem, if you're, like, really looking very, very, very. closely at this is like, oh, you know, everyone's using Ethereum, but I would say no one, no one is using Ethereum, like, on a global scale. Like, you have some applications,

most of them are going to be around, around lending, and there's not, you know, and there's not that much. And so you might be tempted to think, like, oh, well, you know, this thing have not been adopted, but I take the view, and it's not a very, it's a view that's very popular in the Bitcoin Circle, but I think that if you, if you have too much of a platform and technology, mindset, you might miss that. But I think of you is merely holding a token is using it. If you're thinking in terms of censorship resistance, seizure resistance store of values, which are fundamentally what these things are. And you can try to think of them as gas as much as you want. This is not the reality that we are today, not in, not in, not in Ethereum, not in Bitcoin,

not in any network. Yeah, I think like one thing I would do want to mention, like I don't think Ethereum is even close to like most use blockchain. And like I would want to have some data, but I think it goes Git and then a bunch of FASA protocols that kind of follow very similar like crypto, like use Git used by, you know, millions of developers. So Git is actually using, it maintains a data structure, which is pretty much a blockchain. It has like caching. It doesn't have this.

It doesn't have a canonical head. Yeah. So, and so in general, like, and then if we go cryptocurrencies, right, we have Bitcoin. Right, right. I just mean in the smart con, like in the space where you guys are playing. That's what I meant. Like, obviously Bitcoin is, yeah. But anyway, so keep going.

Well, I think it's important to remember how far we are from, like, actually use stuff. That's, I think, like, I think Electric actually has a very good report, which, like, is actually tracked down all. the developers building the space. And it's like, like, lofable numbers, right? It's like 10,000 actual active developers in the like whole like smart contract space, right? I just wanted to say I did an interview with Maria who wrote that report from Electric Capital. So, but anyway, keep going. Yeah. I'm just saying like like 10,000 developers was like, you know, first few weeks of Google releasing the framework, right? That's kind of the, that's kind of the difference of magnitude. So I think definitely understanding how we

can we bring more developers and like people and and actually users because definitely agrees that like if we have developed like developers to come here we need people to use this stuff right they need to have value and need to see value why they will be using this. So I'llia can I just ask you a little bit more about your approach with NIR because so obviously you announced your new funding yesterday. Congratulations and that's the news I was referring to. It was 21 million. And you also launched your proof of authority main net. And, you know, just, I think you would agree with me. Like, proof of authority seems really appropriate for enterprise blockchain where, you know,

kind of the validators are known. There's a very limited number of them. And so I just wondered, like, is this your way of kind of targeting a different audience from the audience that, like a more public blockchain like Ethereum is targeting? No, I mean, the plan is to, like, start onboarding more and more validating. validators pretty much within the months. So we actually have 40 validators running right now on one of our test nets across the world, which actually is more decentralized to some other public blockchains right now. But yeah, so the idea of this POA is really just give the developers a platform to start deploying while we're still testing everything and kind of in a way pipeline

the, like, still validating that, you know, decentralization, everything works, like, the networking issues, all the things, and, like, Zaki can tell how really hard this problems are and how long it takes to, like, debug all this. At the same time, already start providing a platform for developers to actually build applications. And, like, we have few developers kind of who already have an application and actually serving users right now from TestNet, and we really wanted to give them platforms that actually, like, will maintain state going forward. All right. Well, it's... So to continue what I was asking about before, just about, you know, whether or not you guys are

thinking about how you're thinking about Ethereum kind of as you're, you know, working on your protocols and figuring out which audiences you're targeting or which problems you want to solve or things like that. And I guess like in a way, Robert and Zaki, you guys, you're really working in a slightly different way where you're just trying to kind of bring a bunch of of different types of, you know, whether it's different blockchains or I guess for Robert with Schar, it's like, you know, how are you thinking about what you're doing, knowing that like Ethereum at the moment at least in this particular space is leading? Well, as the others have said, like they're leading a developer community, which is small

relative to the amount of momentum that we want the space to gather in the future. and I would like to clarify that the concept of heterogeneous sharding is very, very fundamentally different from homogeneous sharding, because you're bringing in a capability of optimization and specialization that you cannot have with homogeneous sharding. But, I mean, without a representative of Ethereum here, I don't feel too comfortable speaking a lot about Ethereum. So, like, maybe I'll speak a little bit more generally, like how we look at, developer ecosystem and developer growth. I mean, this is one of the reasons that we've historically, and we continue to lead the charge into technology such as rust, like bringing rust into the blockchain space and bringing WebAssembly into the blockchain space,

that these, especially with WebAssembly, when you have the ability for developers to target WebAssembly, you're talking about a system of technologies where we don't have to reinvent the wheel. And you've got the strength of the millions strong developer community, huge open source bodies behind it, all the browsers, vendors behind it for things like formal verification, good developer tools, and for people to write blockchain software in languages that they're familiar with. And I think this is key, right, that you don't have to learn an entirely new language and rather you can maintain your comfort

when moving into a new blockchain space as a software developer who hasn't previously been exposed to those things. So I guess the way I mostly think about the blockchain space and what we're trying to do with Cosmos is, I guess the question. So where Ethereum has been successful is it has been an incredibly successful sandbox for building sort of early financial primitives and onboarding assets and, you know, engage and having some sort of baseline of economic activity on those assets. The question is really, is the like sort of the Ethereum maximalist strategy is, is the way I think about it is, is it's a point of view that's basically like, Well, we can take these successful experiments, organically grow this ecosystem, sort of glue on scalability solutions as they're needed, and essentially sort of organically evolve into the sort of global,

sort of a global financial sort of ecosystem. I guess the sort of Cosmos point of view is that we're sort of missing some primitives there. And the primitive that we're missing is basically this sovereign interoperability primitive. And sort of not having that primitive means that like you can, that these sort of nascent experiments will never be able to grow into sort of large-scale platforms. And, you know, we've had some early signs that there's like general enthusiasm for this. You know, there isn't, we don't really sell the cosmos platform really that hard. But we've seen sort of a number of other entities sort of either adopt the platform wholesale or basically adopt the philosophy and concepts of this, of the platform in what they've built.

And that sort of seems like the indication that we're sort of moving in the right direction by introducing this new primitive end of the blockchain space, which is to a certain extent that that's sort of like our governing philosophy. I recognize, as you guys have all been saying, it's super early and the number of developers that are working in the blockchain spaces is still very small globally. And yet at the same time, you know, I think we could say about Ethereum that at least they do have sort of a network effect. And some of you did allude to this. You know, right now, obviously, defy on Ethereum, I would say, you know, has a certain network effect at the moment. there's about $400 million worth of EFlocked in DFI on Ethereum.

So just like in terms of attracting developers, you know, if this theory that has been talked about for quite a while in the blockchain space is true that, you know, cryptocurrencies and blockchain networks really are about building network effects, then how do you plan to attract developers to your ecosystems? There's actually an interesting point that like public blockchain, in comparison to something like Libra is actually allowed to link to other

blockchains, right? And that's what Zaki working with, IBC, but there's like various ways to connect, which means network effects actually, like, and bringing people into the ecosystem kind of benefits everyone. Obviously, we need tooling and we need like kind of better connectivity.

And that's, for example, we working on a bridge, which is somewhat similar designed to IBC that links to Ethereum and allows you to build applications that just use the kind of existing liquidity, existing Lego pieces from Ethereum on other platforms. And I know like PolkaDOT is doing the same. So in general, I think like there is a network effect and there's people who are kind of professionally like building solidity contracts now and are excited about the space. But I don't think, like, at this point, there is, like, we see that the Ethereum way of, like,

specifically building on this, on this specific technology, right, is winning. And I agree with Arthur here. It's more about, like, like, there's a community of people who are building this financial primitives and excited about the new way of building kind of fintech companies. And they will be looking for kind of what is the best piece of technology that is they can pull together to build a better. experience for users, right? And I mean, even so what happened on like March 12th, right, the kind of spike in gas price, spike in usage pretty much rendered a lot of applications unusable or like the some of the developers end up paying huge amounts in fees, right,

because the Ethereum just couldn't like scale to this kind of very extreme capacity issue. So like there's definitely need for kind of different solutions. And I think like, even this existing cohort of people who already here will be like extending. And I think like jobs apart is to just bring more people who are excited about fintech and see that kind of this approaches and this technologies actually will allow them to get faster to the market. And Arthur, actually, does that apply to you that you can kind of interoperate with Ethereum and some way to take advantage of the developer activity they have there? I see how it applies to some of the other blockchain

when I wasn't sure about Tezos. I mean, you know, Tezos doesn't have any way of, you know, Tezos is what it is. So it's easier attractive to developers or it's not. And the only means that I have to, I would say to make a, attractive to people is going on podcasts and explaining why it's a great blockchain.

So, you know, that's pretty much what I can do for it. But I do think it's very attractive. I think the, the, the spirit and the idea of it is that you can have a chain which is in some sense autonomous. It has internally mechanisms that can make it current over and over and over. And the idea of knowing that you can build on a platform and know that it's going to keep current, it's not just going to be displaced by something else, which is going to be faster or more scalable. it's always, always, you know, the idea of having the means, technologically speaking,

to always be at the forefront or close to the forefront is, I think, pretty compelling. But in general, I think that, you know, if you want developers, the best thing is to have good developer tools. That's what, you know, on top of a good platform you want to have, is easy to use good developer tools. And that's, that's probably a thing. But I would say also, you know, if you're not, you know, if you're not an equal, And much of the network effect of Ethereum, I don't think it comes from the fact that they have existing. It's not so much that there's like what they've built. I think it mostly comes from the fact that they're an incumbent.

And, you know, we're in a space where, which is mostly winner-take-all. And so incumbents have a huge advantage. So Bitcoin is a huge advantage over Ethereum because they are direct competitors. And Ethereum has a huge advantage of versus the other platform just because it was there earlier and it's been there for longer. And it has nothing to do. with, I think, the network effect in terms of developers that they've built is more of a mind share type of network effects that I'm referring to. And I think the way that you can deal with that is by being very focused and by having

a really good understanding of what it is that your technology do, what it is that you're building. And that lets you avoid a lot of dead ends if you understand precise, you know, if you really understand your product. And I think very few people in this space understand. what it is at their, what is at their building? Like, they know how to build it, since you just don't understand what you're building.

Yeah, I mean, I think, I'm just translating that as yours, you know, sort of saying that basically everybody should have a vision and, you know, kind of keep that in mind while they're building. But I was curious to know, like, you know, with Sezos, what are people voting on? You know, I kind of took a look and it looks like it's all stuff kind of really focused on the protocol.

and, you know, it doesn't seem like there's anything controversial happening, but I didn't know, like, aside from that, like, what else are people doing with, with Tezos? So there was actually something controversial in a Babylon upgrade, and even in Athens, there were some discussions over the upgrade. So I think that's fairly important. And you also have to say that because there is, you know, because there is mechanism, it's, you know, you should think of the voting mechanism on a chain, not as the decision procedure, but as a ratification procedure.

In some sense, you have some governance that essentially happens off-chain, but then you present it and you ratify. And basically, I think it avoids a lot of the scenario, which you might have otherwise, where people might push for, you know, controversial ideas through hardforks because they know that they're not going to get to votes. And so you don't necessarily observe it. But I think it has an effect, an important effect on a network.

You know, I think they're using it as cryptocurrency. And fundamentally, I think that if you're building a platform and you're not thinking you're building a platform for application and that you're not building a cryptocurrency, I think you're not understanding what you're billing. If you're not, if you don't think that a CRM is direct competitor of Bitcoin, I think you don't understand Ethereum. If you don't think it's, you know, like whether it's me or Atom or anything like that, they are all direct competitors.

And the fact that you can build application is great. If you can have applications, you know, because cryptocurrencies are, you know, they're good for a few things. They're interesting as they store, you know, if the Cossacks come and try, you know, and take everyone's money and chase everyone from a Scheldt, then you can keep your cryptocurrency and that's great. That's, you skate number one. It's case number two, you want to make a lot of cross-border payment between machines all over the internet. It's completely infeasible to use one of the thousands of payment networks that exist out there. You want to use cryptocurrency. Great.

If you want to pay, if you want to pay fees for a smart contract, that's a great way to use a cryptocurrency. So having smart contract, being a smart contract platform, lets you use your cryptocurrency in a useful way, but you're still building a cryptocurrency fundamentally. And if you're not seeking a bit of this cryptocurrency, you don't understand your product. In response to the challenging times, crypto.com is introducing three measures to help the community. First, the 3.5% credit card fee for all crypto purchases will be waived for the next three months. Second, you could get up to 10% back by using the MCO Visa card on food delivery and grocery shopping at merchants like Uber Eats, McDonald's, Domino's Pizza, Walmart, and more. Don't have a card yet? Buy gift cards on the crypto.com app from merchants like Whole Foods, Safeway, Burger King, Chipotle, Papa John's, Domino's, and more.

And get 20% back on food and 10% back on groceries. This is a global offer, so check out which merchants are available in your country. Download the crypto.com app today. Today's episode is brought to you by Cracken. Cracken is the best exchange in the world for buying and selling digital assets. With all the recent exchange hacks and other troubles, you want to trade on an exchange you can trust. Cracken's focus on security is utterly amazing.

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around the world and designs so that existing financial systems can work together on a single platform. Transactions powered by Stellar are low cost, transparent, and fast, saving both businesses and end users the time and money associated with traditional payment networks. With Stellar, your business can issue digital dollars or exchange existing fiat currencies without the need for complicated smart contracts or new programming languages. It's robust documentation, toolkits, and multilanguage support let you quickly integrate Stellar into your existing products and services. Learn more about Stellar and start billing today at unchained.stellar.org. Yeah, I'm just so curious, Zucky, Robert, and Ilya, do you agree that Bitcoin and Ethereum

are direct competitors? Because I don't see it that way at all. Well, what I think a lot about is, So, like, we have platform technologies, and each of us have, like, different platform technologies. But it is somewhat, like, the search for comparative advantage for a token is also, is also sort of somewhat like, it's like a different, like, technological progression to the, like, platform evolution. Like, they're coupled because the, the token exists within the platform technology. but you have the search for comparative advantage. And comparative advantage is not zero sum, but there is a relatively narrow space in which to search for that comparative advantage right now.

And that does sort of render all of our tokens that like into in something of like a competitive space. Well, it's competitive, but it's not zero sum, at least at the moment because there's a lot of room for growth. So, like, I think that's a very important distinction to make is that, like, what one protocol gains is not necessarily the loss of another protocol. I mean, once you've saturated the market, yes, I think that this would be the case. But at this point, we're looking for differentiators that will just expose us to broader and broader markets and bring more people into the space. I think good framework is that, like, tokens and especially, like, monetary policy is in some way a central bank of this, like, country of, you know,

people and users and developers and everyone who is using this system, right? And like in some way, obviously, you know, every country wants to take over the world. But at the same time, you know, we actually have countries coexisting to some extent. And the central banks have a very different properties around like what is their economics is based on, right? Like, you know, if you look at sounds like Russia, for example, a lot of its economies based on oil versus, you know, I'm not going to talk about US. But in general, right, the way the economics of the central banks operates can be very different. And while, like, at the same time, it is money and, you know, it is, like, it is what people use for, like, day-to-day operations. So I think, like, it's important to remember that,

like, yes, in, like, underlying way, kind of when I agree with Rob, when we, like, saturates the market, it will become, like, somewhat more of a competition. But at the same time, the economics can be based on very different components and like utility that it provides. I do want to mention though that on the governance side, just to put one thought, I actually don't believe there will be contentious hard forks in proof of stake systems at all.

Because in proof of stake, like in proof of work, the decision of switching to a new protocol is like on miners, but everybody else needs to accept it, right? Like, everybody else needs to also change the binary. Like, because miners can, you know, shift and keep and like start mining a different chain. But if I'm running my node, I can start mining the old chain, right? So there can be like natural forks and like mining power.

In proof of stake, especially BFT where we prefer liveliness, you kind of need 66% to switch or you need both to be like contentious hard forks, right? You cannot keep the chain that like no changes chain. anymore because you don't have a like super majority to produce blocks in the first place even if like more than 33% left. So it's actually like and the kind of somewhat bad part about this is actually if there is something like this happens and both chains modifies their state to produce new like forks, then the choice is actually not at people's hands but it exchanges hands because the people who decide which one to value and which one has stake is like,

you know, whoever, whoever values it and whoever puts a price on it, which right now are exchanges and centralized exchanges for the most part. So there's a lot of, there's a lot of like mechanics as we need to be aware of here. I don't think that miners decide on forks in proof of work because miners are, you know, miners have to expand in exclusivity in order to mine. and so they're going to follow markets, and markets are going to follow basically social consensus. So it's a bit of a circle where everyone is trying to commit very hard to one branch of the fork, but it's hard to make credible commitment,

where there's so much on the line. It's kind of a giant game of chicken between users, maybe exchanges, minors, and you get an outcome which basically you end up with groups having massive leverage just because it's just so entangled and you have this. crazy game of chicken. And that's, I think, the beauty of having ancient governance is that you bypass this thing. I also say that even if you have, you know, even if you have BFT, like classical BFT for doing a consensus, you're still, you know, you can still have contentious hard forks because you will have validators who just decide to go on both wrench.

And it's, you know, they can't be slashed, you know, it's easy to, to modify slightly the code in one wrench to make sure they're not going to be slashed from one to the other. And so they'll just sign both. I think it depends on the mentality of the validators. If you have valetators, which are convinced that, yes, it's important to maintain the integrity of the network, it's fine. But if they are in the school of thoughts of, oh, you know, we're just building technology platforms, they're just applications, then, you know, in other words, if they don't get it, then, yeah, they're going to be on multiple platforms. Yeah, I would just add to that that if we just look at history with what happened with Ethereum Classic, there were,

some really small number of miners, maybe like one or two or something, that kept the old chain going originally. But Ethereum Classic didn't really exist until the exchanges started offering it, offering trading on it. So, you know, it really was a situation where the exchanges actually led. And the exchanges themselves would say it was the users who led because they were demanding trading in it. So, you know, just from that one example, I don't know if I would say miners were the ones who decided. But one thing I just wanted to ask was I don't remember who it was. Well, I just wanted to mention, like, when I said miners, I said miners can, not that they are driving. But like in general, if there was no miners, right, there will not be Ethereum Classic.

Like somebody actually mined in proof of stake, like if I decide, you know, to fork off a Tesla's right now, like, it's not, you know, it's not, like, I will not be able to, like, produce blocks, period. Like, or it will be producing blocks. There are also like something in Valchain. I'll have to tweak the state, but you could, you could if you just took a state enough. And that is a contentious hard fork. Like, that's a definition of contentious hard fork tweaking the state. So, like, like, that's what I'm saying. There's no zero choice.

There's always, like, like, whatever kind of, whatever's the super majority wants or, or nothing. There's no, like, kind of splitting into, like, contentious, like options. And the problem, oftentimes, the problem is not that you have a fork and that there's, you know, is here in classic or a Bitcoin Cash or something like that because these are generally very small. The problem is that the one that becomes canonical becomes canonical for the wrong reason. And so, you know, the problem with the forks is that what, it's not that, oh, you're going to have two branch. Because one branch is almost always going clearly going to be a canonical branch. The problem is the function that decides which branch is canonical.

Okay. Yeah. I, oh, Zaki, did you want to add on this? I mean, this is interesting. Well, all I wanted to say is, I think that, like, a big part of the design of, I think, you know, so polka dot Cosmos and Tezos at very least are people who are like, I've been designed by people who are, were like around for the blockchain wars of 2015, 2016, 2017. And so they are informed by like, the political process of that. And, you know, Cosmos, you know, a year into its life is just kind of starting to experience a world where we actually have, like, real, real politics on chain. And there are real protocol governance questions.

And these things are, so we're, like, very early in the maturity process of that stuff. And so, like, our experience with this sort of, like, political systems are, like, our experience with the limitations of the technology platform and how that affected the politics informed these like design decisions, but they didn't, we are still yet to know how they play out. It isn't until you really stress the system and still there is like tension and contention and like disagreement that we really know any of this stuff and how our how our design decisions have played out. But like that's like that is where you kind of the rubber moots the road on these protocols is, is how they're going to process all of these political changes and, like,

how a polity and how, like, an actual community forms. So we're still, like, very early days in these things. But I think that would just generally be, like, I think something that people kind of miss in the, like, this technology is better than that technology. We're trying to operate at this, like, intersection of, like, developer onboarding community and politics on top of a technology platform. And it's only the combination of all those things that eventually becomes like a significant player, not any individual aspect being better or worse. Yeah, that's actually I feel like maybe what Arthur was saying in the beginning. But I find it interesting because I do agree with you that it does seem like those tensions from those years have really informed the different design

choices that you guys have made. But what's interesting, and I didn't realize it's actually literally until we were here talking, meaning like before when we were, figuring out who would be in the panel, I didn't think of this. But it does feel like, and Arthur, correct me if I'm wrong, it does feel like, and actually, I think even in this conversation, you've, you've already had like a slightly different vision was, were you the one who said that this is like a winner take all space? And then the others were like, no, it's not. Was that you who said that or who said that? No, I did say that, but I, I agree with Roberts that, just because it's winner take all doesn't mean that now it's, that is negative some now. I don't

think it's negative somehow because in the world of Paul Graham, you know, Paul Graham says most startups don't compete against each other, they compete against anyone giving a shit. And clearly, blockchets today, they're not startups, but they compete for something. And right now they compete again,

anyone's giving a shit and not really against each other. What I find very sad is that I think that the economic insight behind maximumism is correct. And some people use a correct economic insight as an excuse to, you know, not only be dicks on the internet, but like, you know, right call for state violence. And I find that absolutely despicable. But the economic insight is correct. I think it's way down the line. And I just think it's better to maintain a, a, a, a, a, a, a, a, a, a, a, a

collaborative environment, you know, and see, uh, and see who makes it out alive rather than, uh, rather than try to, uh, to tear each other to pieces like that early in the game. We, we, we tear each other to pieces in 10 years, okay, not now. Well, but so I'm curious to know, like, Robert Suckie. and Ilya, so because you guys had this like slightly different vision that you guys were talking about. So do you agree with Arthur that someday down the line it will become winner take all? Or do you just fundamentally foresee a totally different future where, you know, it's kind of like more this interoperable world that that you guys are trying to build? I think that's, that's in many ways just the nature of things, that things follow power law distributions and that when you start to run out of resources, competition is inherent.

And you can see that in many different ways and plays. places in the world. I don't think that this is going to be any exception. But like the road that we have out before us is one that has a long way to go before I think we reach that point of exhausted resources and fervent competition. At the end of the day, though, blockchain protocols need to provide value for the token in order to provide security. These things are built off of incentive loops where new issuance, you know, has to be based off of demand that drives security. So if there's no demand or if there's more demand for another platform, then down the line, if there's a limited amount of possible demand, then you can't secure all of the platforms or some of them may grow largely more powerful than others. But as Arthur says, I think that this is really why, you know, I'd like to strike the point that things are not settled right now.

Like, the best directions to go in are unclear, and that it's really a time for experimentation. It's for projects to do something different from each other. it's one of the reasons that we also are using on-chain governance in our protocol because we think that one sometimes the I mean the alternative seems to be as we've seen from history oftentimes just no governance that nothing happens and you get caught in kind of obfuscated power structures and your your systems don't adapt as they as they should so a formalized system of government allows the system to adapt bring in new technology but also allows people to just fundamentally put their money where they're mouth is. And if they want to back a position with a certain amount of conviction, they can spend money and they can spend time in order to back that position. And, well, whichever the community decides is the way that it's going to go. So my general thought here is that there, I expect there

to be fundamental tradeoffs in, in like, sort of what tokens can be good at. I think there are going to be like sort of politics and governance will will imply that like not everything is for everyone. And so, you know, if you are, if a token is sort of pursuing this like monitor like base layer monetary vision, it's likely to be like a sort of politics list protocol and sort of optimized for that. You know, there's a, you know, I think all of us are serving, definitely building systems that are more sort of specific. And we'll just. tend to end up with like unique characteristics. And so I just, I'm more skeptical than in the blockchain space that you'll follow the sort

of standard technology industry power law distribution because of sort of scalability constraints about communities and, and sort of standard practices and around like how your blockchain actually works. So more skeptical of anything truly achieving like sort of, like, sort of, like, sort of like a winner take all space. And Ilya, you got cut off earlier. What were you going to say? Yeah, I'm actually with Rob.

I do think like it will follow power law. And like following my example with countries in central banks, like, you know, we do have few superpowers that kind of controlling the world in many ways. And then there's, you know, a few other like sub kind of followers in the way. I do else like on the other side of this, like, this space is evolving so fast and like even in the last two years like we learned a lot kind of new things there's new cryptography coming out there's all kinds of things happening all the time so it's both not the time nor it's unclear that like what we think right now is the right way will be right way you know in in a few years right like it maybe you know we all switch to zero knowledge proofs and we don't need a chain right we all just exchange zero knowledge proofs offline or like p2 p2 p or like p2 p. right. There's like so many like possible other kind of alternatives. And I think like us exploring the space and like figuring out what works right now and how we like get it to people is important,

but also like looking forward to new technologies is definitely something. And like it may reshape completely how we think like this will be evolving. Right. I mean, same as like before Bitcoin, nobody could imagine this kind of thing. Like there's a possibility that there will be some new like kind of evolution that will completely change how we look at this. So we should be like open-minded about that. At the same time, like, I'm agreeing, like, we should be evolving. And, yeah, like, our plan is kind of continue both working as well as, like, continue evolving the protocol and, like, both feeding it closer to, like, what developers need, what users need

and, like, bringing in new technology. So, like, I do think governance is very important. I don't think that direct token holder voting is the best way to do it. And I don't think we have a good way is right now to kind of organize it. At the same time, I do think in proof stake right now, validators are kind of at power, one way or another. Like, the odds are people who are running code and they are defining what blocks are produced. So like pretty much building from there and kind of evolving that into like operational governance is crucial. And I think, I mean, like, I'm here in many ways following Zaki and with Cosmos and, like, what they've done already.

Just because, like, they kind of gave power to validators and, like, kind of delegators through the voting. And then pretty much, like, given they are to pretty much producing blocks and signing it and running hardware is, like, a reasonable way to, to start from. But I do think we need to bring more people who are actually, like, would be introducing other sides of this, like, non-productical developers, kind of community leaders and in, like, other, like, financial institutions as well to kind of manage how this is going forward. Well, that's actually, yeah, that's kind of where I want to go next or depending on the time, this is probably where we'll leave off. but basically like, you know, if we're saying like it's so early in the space that we just need to get more people in, you know, how are you doing that? Like, you know, you guys did talk a little bit about the technological things that you think will, your technical features that will interest different developers and stuff. But like also there are the community aspects and everything. So like just in a holistic sense, like, you know, what are all the different things that you're thinking of doing to bring more people in and to get people to use your networks and to, um, and to, um, and to, you know, to just get into cryptocurrency. Hopefully this is not one of those questions where nobody has a plan.

So I'll answer that by rebounding on what Zaki was saying. You know, Zach was saying if you want to be something akin to money, it shouldn't be political. And I agree with that. But I also think that, you know, the protocol themselves shouldn't be political.

The best way not to be political is to basically have very strong norms against never changing anything, but then you give up on innovation. And so I think right now, if you look at these cryptocurrencies, they're not quite money, they're proto money. And as such, they are political projects. It doesn't mean they have to be internally political,

but you have to understand them as political projects. And I think embracing that is a way of growing communities because it's accepting the nature of the beast. But how do you bring that message to people out? like how do you get people outside of crypto to take an interest in that? Like, like, like what you just said just seems very kind of internal, like not something where, like, like, what would be your message to somebody who's not in the crypto space to be like, hey, come check this out? So my point of view is on this is, I think the next sort of interesting big steps for Cosmos is, you know, the atom community is a very crypto native community. But I think that we have participants in the Cosmos ecosystem.

whether you have like the agoric folks who are, you know, very native to like the mainstream Java community. They've been part of the sort of JavaScript standards work in the like mainstream distributed competing world for, you know, 30, 40 years. Is there a community that's going to be founded that's sort of more based in that world? You have people like region who are sort of based in sort of like the environmentalism, sort of sort of ecological transformation movement. So in many ways, I think the way that you get mainstream people to care about blockchains

and the way Cosmos helps onboard those people is the ability to sort of go and land sort of social coordination mechanisms that are native to those communities and sort of, and then bring them and connect them to some of the more crypto-native communities inside of the cosmos. Yeah, I think it's actually, there's a trend that's happening in the real world. which is communities wanting to have more control and moving away or like trying to kind of build that control outside of this big distribution platforms like Facebook, Reddit, etc. And like Hiker Noon is a good example, right?

They moved away from medium so they have more control over their platform over their users, over the monetization, et cetera. And this technology, like as part of it provides kind of a substrate for sounds is like how to build a community, how to bootstrap it, how to align incentives and create new economies around this. So I think that's like an interesting perspective. That's the one which Vitalik mentioned yesterday was around just like kind of control as a liability. We have this huge platforms that now pretty much becoming like they need to like exercise control over and censorship over their own product and kind of sometimes censor even governments. And like for

them, like, something that actually decentralizes control and, like, in a way, removes the need or brings it back to the communities, to the kind of more local governance, provides a new way of doing it, right? But, like, I think at the end, what we do need to do is, like, stop, you know, talking about, like, how can everybody use blockchain? Like, I do agree that, like, it's all about money and politics in underlying way, but at the same time, like, most people, don't really care. Most people, like, when they use an application, right, they don't think this is like a SQL application, right? Or a, you know, like, they just use an application. Like, they don't care. So it's the same, like, they don't think the dollar is, you know,

gold-backed or not gold-backed. They just want to use a dollar and buy something with it. And we need to get to that point where, like, like, people actually just use this for the function and kind of start operating on that level. And, like, I'm, like, I'm merging from Ukraine, our economy sucks. Every crisis that hit U.S. hit Ukraine twice, three times more. And I'm actually very scared of what's going to happen given what's happening with U.S. right now. And like, there's a huge opportunity for like this technology and especially money as like a way for people to, you know, shelters their savings and, you know, actually like hold up in their like economic turmoil. The problem is the kind of stuff is like completely unusable. Like no people can.

and actually like, you know, get it on their phones or devices. There's no, like, markets created in the local countries, right? So we're in the need to, like, really up the game on usability and really up the game on actually, like, liquidity. Like, if you think of, like, USDT, which is, like, in a way, the only right now usable stable coin, I mean, I love Maker, but, like, the amount of dyes that exist in the world is, like, so small that, like, it's not, like, really operational. So, like, if we think of USDT, out, like, removing all the issues of, like, you know, how it's managed, et cetera.

Again, it's just, like, it doesn't have liquidity in the places where it needs to be, right? Like, where people actually have demand for dollars and there's no dollars and there's no, like, way to acquire them. So I think, like, we kind of need to, like, start investing more in this, in this types of things on top of, like, just making this stuff really usable for people. So one other thing I wanted to ask about was, you know, right now while we're speaking, we're kind of at the beginning of what will eventually be a multi-phase and quite long transition to Ethereum 2.0. And so even though we were just talking about kind of getting people outside the crypto space, and I'm sure, you know, you do want to also get developers who are already developing in crypto, interested in your projects. And so does that create a, some kind of opportunity for you? Like, how do you think the transition to Ethereum 2.0 will sort of shake up the existing kind of blockchain space? Ask me again in 2016. 2016? I remember in 2016. I was, you know, I was talking about Tesos and how we had proof of stake

and everyone. And I remember people saying, like, well, who cares is this to this proof of stake? Because you're going to have proof of stake next quarter. So, you know, I think what, it will be great. I think there's a lot of super interesting design in the serum 2.0, you know, but I feel like Ethereum gets all the credit of Ethereum 2.0 with none of the deployment. So let's give credits to the blockchain which are out there, which are actually sharding, which are actually using proof of stake, which are actually, you know, doing this thing as opposed to talking about them. Well, and just out of curiosity, like, would you say that most people that are interested in Tezos just are developers that didn't have previous experience in crypto, like didn't come

from another blockchain. They just came straight to Tezos. No, I think most people, most people who took an interest in Tezos had an interest in, had an interest in cryptocurrencies to begin with, although I think we, I think more people had an interest in Bitcoin and Ethereum, I think, in terms of the balance in the community. That's a, I would say that's a, that's a difference. Oh, interesting. And what about the rest of you guys?

How are you thinking about how that's going to affect the development of your protocols or interest in them? So one, I guess, thing that I think a lot about with Ethereum 2.0 is Ethereum has sort of barked on this strategy that is very much like, okay, we are going to sort of ground up design a second system. it is an interesting strategy because there's an alternative strategy which is we're just going to try to colonize our network effects into other people's technology stacks and that would it's sort of I guess an interesting and alternative strategy and it sort of remains open to Ethereum the option of pivoting like Ethereum could pivot and decide you know there's like a lot of things that we like about the near technology stack. It's close enough to the Ethereum 2.0 vision.

Why don't we just colonize it and then try to bring our network effects over into that technology stack? It is, we are all building open source technologies. There is nothing that stops any one of our technologies from sort of colonizing the ideas, ethos, code of each other. And I'm kind of surprised that this happens less than, than you think. So I think the most, the way to think about, the way I think about Ethereum 2.0 is Ethereum 2.0 will be the attempt of the Ethereum community to move their network effects into a new system, to take that network effect with them into some new technology. I think the assumption that like Ethereum 2 point, that like how that happens is sort of like a fixed vision may not end up actually being the case.

and so it'll be interesting to see what occurs. Okay, we probably have time for one more person who might want to jump in on that. Yeah, it's a lot about, like, excitement in the space, and Ethereum 2 has this kind of ring to it. So I think, like, from our perspective, like, we focus on developers, and bringing it to end users, like bringing their product to end users. So in many ways, like, like we, you know, cooperate or like have conversations with the Syrian Foundation on like technology and underlying things.

We shared a lot of like indeed ideas like with Zaki and so polka dot folks. And like I think like on technology side, I think it's kind of a, in a way like shared mind space of us all figuring out what works, what doesn't and how to make it. And I think like on on network effects, I think it will be more utility. And in some, some forms maybe the like governance and politics. But I think the kind of like utility and functionality and getting this to the users will be the like driving factor first. And like I think like all of us are focused on a different aspect of this and how this is brought to developers. and we all kind of proving that this is the best way or this is like at least, you know, a sizable chunk of the market. And we'll see, we'll see how it will play out. Exactly. We'll know

what works when it's all over. All right. Well, thank you all so much for joining us and thank you also to the audience. And I hope you all have a great day and stay safe and healthy, everybody. Thank you, everyone. See you guys. Thank you. Thank you. Hi. Thanks for tuning in to learn more about Ilyapalosuke of New Protocol, Zockemonian of Cosmos, Robert Habermire of Pocodot, and Arthur Brightman of Tezos. Be sure to check out the links in the show notes of your podcast player. Don't forget, take the Unchained SurveyMonkey.com slash R slash Unchanged 2020 to have your say and how we can improve the show. Again, you can have a chance to win a metal MCO visa card that Crypta.com will stake indefinitely, and that offers free Spotify, free Netflix, and 3% pack on all your

spending. Plus, earn extra interest on your crypto deposit. For your chance to win, fill out the survey at surveymonkey.com slash R slash Unchained as produced by me, Laura Shin, with help from fractal recording, Anthony Yoon, Daniel Ness, Josh Durham, and the team at CLK transcription. Thanks for listening.