Unchained - Three Crypto Pioneers on Crypto’s Monolithic vs. Modular Debate - Ep. 589

Episode Date: January 2, 2024

In this episode of Unchained, Anatoly Yakovenko, co-founder of Solana Labs, Nick White, COO at Celestia, and Chris Burniske, partner at VC firm Placeholder discuss the differences between modular and monolithic, or integrated, blockchains, with Solana epitomizing the monolithic approach and Celestia the modular one. They all agree that both approaches have their merits and will likely coexist, but argue each lends itself to specific use cases and developer preferences.They also discuss what will drive the next crypto bull cycle, and each gives their best predictions for a specific development in the crypto industry in the next few years.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: Chris’s explanation of the modular vs. monolithic approach in blockchains What drove Anatoly to prioritize speed in Solana's architecture and its impact on the network What Celestia is and how it represents the first modular blockchain network Whether developers and users will gravitate more towards modular or monolithic blockchains How Solana, as one of the fastest blockchains, is gearing up to handle massive usage and scalability Why Chris views Celestia as a frontrunner in the data availability sector How Nick perceives the philosophical similarities and executional differences between Celestia and Solana Whether there's potential for Solana to transition into a modular blockchain in the future Why Chris believes that the Solana Virtual Machine (SVM) might surpass the Ethereum Virtual Machine (EVM) in user adoption What challenges Bitcoin faces in developing actual Layer 2 solutions, especially considering its "doomers storage" issue What could drive the next crypto bull market Top predictions for 2024 and beyond  Anatoly’s perspective on how a significant hack could pose a serious setback for the entire industry  Thank you to our sponsors! Arbitrum Foundation Popcorn Network iTrustCapital Guests: Anatoly Yakovenko, cofounder of Solana Labs Previous appearances on Unchained: Anatoly Yakovenko on Solana’s Astounding Recovery and Its Future Plans Will Solana Be the Execution Layer and Ethereum the Settlement Layer? Can Solana Seize Marketshare From Ethereum With Serum? Anatoly Yakovenko on Why Solana Is Building the SAGA Chris Burniske, partner at Placeholder Previous appearances on Unchained: Two VCs on Why This Is the Perfect Time to Invest in Crypto 2022 in Review + How Cobie and Chris Burniske Are Playing the New Year Cobie and Chris Burniske on How to Navigate a Crypto Bear Market How To Value A Crypto Asset Nick White, COO at Celestia Labs Links Modular vs. monolithic Alchemy: Modular vs. Monolithic Blockchains Visa: Monolithic vs. modular blockchain Chris Burniske’s tweet on modular vs monolithic “The horrific inefficiencies of monolithic blockchains” by polynya Blockworks: A spicy salvo launched in the monolithic vs modular debate Unchained: What Is the Blockchain Trilemma? Celestia Celestia’s explanation of modular blockchains Data availability Data availability sampling An introduction to sovereign rollups Spot Bitcoin ETF: Unchained:  Why The Spot Bitcoin ETF Is a Big Deal Deciding on Bitcoin: Should New Investors Jump In Now or Wait for an ETF? Ledger ConnectKit incident Unchained: Ledger Library Compromised, Causing Confusion and Panic in Crypto Community Learn more about your ad choices. Visit megaphone.fm/adchoices

There is work to modernize the EVM, but from a user experience cost performance perspective, SVM is clearly superior right now to the EVM. And so I think that it's a lot easier to onboard users to play with on-chain applications. When I travel internationally, I used to tip people in ETH. Well, actually, it was Bitcoin, and then I would tip them in ETH, and now I tip them in Sault. Hi, everyone. Welcome to Unchained, your No High Please Source for All Things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago, and as the senior editor of Forbes, was the first mainstream reader porter to cover cryptocurrency full-time. This is the January 2nd,

2024 episode of Unchained. With I-Trust Capital, you can buy and sell crypto in a tax-advantage retirement account. Enjoy significant tax advantages, 24-7 access and the industry's lowest fees. Arbitrum's leading layer two scaling solutions can provide you with lightning-fast transactions at a fraction of the cost, all while ensuring security rooted on Ethereum. Arbitrim's newest edition, Orbit, enables you to build your own tailor-made layer 3. Visit Arbitrim.io today. Streamline your Defy with Valtcraft, the ultimate on-chain toolkit for deploying custom automated

defy products on any EVM chain. Join Valkraft's referral program, unite with the community, and supercharge your crypto. Details on Valkraft.io. Today's topic is modular versus monolithic blockchains, but also 2024 projections. We're going to mash it all up into one show. And here to discuss our Chris Berneski, partner at Placeholder, Anatoly Yagovenko, co-founder of Salonar and Nick White, C-O-O at Celestia Labs. Welcome, Chris, Anatoly, and Nick.

Thanks, Laura. Hey, Laura. Good to be here. Yeah, thanks for having me. So, Chris, you were the person who came up with the idea for this particular episode, and you were interested in talking to Anatolia and Nick, because, as you put it, Solano was the most successful asset of 2023, and it's a monolithic or integrated blockchain. And then Celeste, on the other hand, is what you call the most successful launch of 2023, and it has this modular approach.

So why don't we just start with definitions? Go ahead and describe for the listeners, you know, how you would. describe those two approaches to blockchains. And then without saying which of these you think will win out or is superior, if you have a view on that, you can also explain the pros and cons. Okay, we'll do. And I'll probably rely on Toli and Nick to give even more precise definitions because they're more expert than I am. But I think, I mean, this podcast started because you asked me who I would want to talk with. And I was like, well, you know, Solana and Celestia and Tully and Nick. And I really think of these two teams as the modular versus integrated barbell. And I don't

want to pit them against each other so much as I want to talk about ways in which they're uniquely useful approaches in different settings. And to first define them, you know, I think of modular as thin pieces loosely joined. Right. So you have different layers of a stack where a single protocol is best in class at doing one thing or a very limited set of things. And so, you know, the terms that come up often in modular are data availability, settlement, and execution. And we can dig into those more. And Celestia is best in class in data availability, right? And it's really category leading and defining of data availability. And then integrated says, hey, We're going to take those layers of the stack,

and we're going to so tightly integrate them, that the end experience to both the developer and the user is going to be more seamless than if you took the modular approach. Now, there's a long run debate of which will be cheaper, which will be faster, which will be more scalable, and I think we'll get into a lot of that today. One of the analogies you could use here would be, say, iOS, which is very vertically integrated on the Apple side versus Android, which is very pieced together.

Now, there's a lot more users in the world on Android, right? But iOS is an extremely valuable ecosystem, right? And underpins Apple as one of the world's most valuable companies. You wouldn't as an investor say, I only like iOS or I only like Android. If you could invest in both, you would invest in both. if you're a growth-minded, like, non-tribal investor. And so that's really where placeholder sits. Placeholder works with both Tolly and Nick.

Celestia has had the most amazing launch of 2023, in my opinion. I kind of think of each year as having a launch that defines that year. And then, you know, Solana is the phoenix that has risen from the purported ashes in 2022. You know, 2022 was probably Solana got the biggest shell. lacking of any asset in 2022, but bonded through that process, further forged its soul. And I think proved a lot of people wrong about the direction that it was going. And I think that now people look at within the integrated stack, you know, there's really,

I still think of Ethereum as more integrated than modular. It's kind of migrating towards modular, but it's really Ethereum and the EVM or Solana and the SVM are the two that you would choose from. in the current developer climate. Yeah, I actually realized there's a good analogy for what Solana went through, which is I actually feel like the FTX debacle was Salana's Dow movement. Yeah. Yeah, although I guess Salana had achieved probably more success than Ethereum had at the time.

But in a way, both of the blockchains came out stronger from those events. So, and it's only, why don't you talk a little bit about why it is that Salon is pursuing this integrated approach. I have this like obsession with the idea that we can synchronize all the world's information in one kind of chunk of memory, like one memory I mean by like your computer RAM. So it's kind of the fastest place where you can store information. And we have like that chunk of it, however big we can make it, we replicate it and scale it around the world. And it's like as if you like drop a bit into this bucket and it quickly rapidly is replicated around the world and everyone knows about it as fast as speed of light allows. And the reason for that is because I think if we can achieve that,

we kind of can achieve a better price discovery engine than you can do with like New York Stock Exchange or like NASDAQ or whatever. Because even though those systems trade at like these sub-nanosecond matching engines or whatever, information still has to propagate around the world. Like you have some news event that happens in Singapore, something that's important to markets. It has to go speed a light through fiber or whatever, satellite, some path to get to a trader in New York so they can look at their terminal, right? And it has to hit that algorithm that's housed inside New York Stock Exchange for that algorithm to go take action at the market.

And if at the same time in Singapore, somebody, of state transition to a very local, like, multiple concurrent block producer on Solana, that block producer will start transmitting that transaction around the world as that news travel. So by the time somebody is looking at markets in New York, it's already in the state of Salana, right? Like that news event already like took effect in whatever market is important to it. So there is no arbitrage anymore between New York or a decentralized system run by a bunch of volunteers and commodity hardware. And that's really, really, really cool.

That's just like science fiction, right? Like if we can build that, I think that really levels the playing field at the hardest part of finance, which is like the actual where all the money's made is an execution, it's in trading, it's in this like synchronizing information and information arbitrage. We can level that playing field for the whole world. I think it's kind of like one awesome engineering achievement. I can pat myself in the back and be very proud of that. And two, I think it actually creates value for the world.

I think it's awesome and, like, we'll, like, make finance, more transparent and better and cheaper for consumers, and all those things are good. So this is kind of like that problem is what I want to solve. And if modular approach was, like, the better engineering solution, I would throw out all the Solana code, copy Celestial Code, and we'd be doing that. Like, I have no qualms about, like, implementation.

It's just, like, starting from, that is where we have, like, to the best of our ability, like, so far we've gotten this far in the implementation. All right. So I'm sure probably both Chris and Nick have thoughts on that. But before we get to that, why don't we just have Nick explain what Celeste is, what it does? Obviously, it's, you know, the newer project here. And so some listeners may be unaware.

Sure. Celestia is the first modular blockchain network. And it has a unique property, which is that it. can scale with the number of users and nodes in the network. And its core value proposition to developers is that it makes it easy for anyone to deploy their own custom blockchain. And so to explain what a modular blockchain is, building off of what Chris said, instead of putting all the functions that you need to build a decentralized application into one protocol, a modular blockchain splits them up into different component protocols. And then those protocols can

be optimized for that specific thing. And you can have a whole suite of these different protocols. And then as the developer, when I'm going to build my application, I can pick and choose these different components and slap them together into the full working end product. And that enables me just a whole new degree of flexibility and like customizable. And it enables me to build things that are not possible when you're stuck with, you know, a one size fits all sort general purpose, like monolithic approach. And so, you know, I kind of think of monolithic is sort of a one-size-fits-all, and then modular as more tailor-made and more customizable.

And I think another aspect of modular broadchains that I think, you know, we really care about is this idea of permissionless innovation, which is that if, you know, there's one team or like just one protocol, you can only really, it limits the amount of innovation you can do, right? Because that one protocol kind of makes all the decisions. And in a modular setup, anyone can go and say, hey, I actually don't really like the way the execution is done. So I'm going to write my own execution layer. Or I don't like the way that the data availability is done. I'm going to do it differently. And so you, and we're already seeing this happen and take place. A lot of really talented builders are coming in and innovating on these different components. And

we're having this explosion of different pieces that people can build from. And so I think that just fundamentally speeds up the rate of innovation in crypto more broadly. And it's kind of like a I think monolithic is sort of like a top down like, hey, we're going to decide for you what the infrastructure stack should look like. And then a modular, it's more of a bottom up, you know, hey, developers, builders, whoever is out there who's talented, come and build your own pieces and let the free market decide which ones are the best. So that's that's the way that I see modular versus monolithic. And as Chris said, Celestia is focused on specifically data availability. So we've implemented a new technology, new cryptographic primitive called data availability sampling.

Essentially what that does is it enables the blockchain to be verifiable on consumer hardware like a smartphone. And also the more people that are verifying the chain and running the these light nodes, we call them, the bigger the block size can get. So for the first time, you don't have sort of a fixed capacity or throughput for the chain. It can grow as there's more users and people running nodes. Yeah, I take your point from earlier about kind of how you can make things more customizable when you're going for the modular approach. Honestly, the way you were describing it, I was actually thinking about how the world has shifted more and more to this SaaS model, you know, software as a service. And there's some kind of idea like that,

like, oh, you know, so let's say at some point in the future, there's multiple competitors to Celestia. Then, you know, some developer could say, oh, actually, like, Celestia doesn't work, you know, quite well for me for data availability for this or that reason. But this other one, you know, is more suited to my needs or something like that. And yet at the same time, you know, I'm sure most of us, you know, I asked us all to silence our phones before we started. And I know Anatoly uses an iPhone in addition to a Saga phone. You called a Saga phone is NFT phone. But Chris and Nick, I'm assuming you also used iPhone.

So that's kind of a vote for the Solana approach. I'm just curious maybe to further that point of the discussion and just hear everybody's thoughts on how this might look in the future and how people you expect will both build in the space than what, you know, most people will end up using. To like defend like Nick a bit, I think like developers are impossible to market to. Like it's basically like there's no way you can sell something to a developer. You can like inspire them to go build something. And the modular approach like like in operating systems, there's like a whole genre of operating systems actually called modular operating system. It's very opposite design from Linux.

And if you're coding in Linux, you're kind of stuck in this box and you have to build things a certain way in C, in interfaces that were built 20 years ago. And it's very, like, constraining. It's a job. And there's, because of that, there's like a whole suite of operating systems that people have, like, can build way more expressive things and totally different applications.

And these actually have spawned, like, during the mobile era, like during the mobile wars, there were like dozens of competing OS's. The vast majority of them were not built on Linux, actually. It was like very much a modular approach like QNX because developers could get like nerdsnapped and built something really cool there. So you kind of like, I think there's just no way

that like giving developers optionality is not the right thing. Like that has to exist. I think like a super high optionality like environment is going to exist because there's always developers that want it. So you have. have to kind of like pick what you're optimizing for and like that's awesome like I think that they're doing it like from our perspective that's not like what I care about so like I'm optimizing for a very specific thing and that nerd snipes are developers right that really care about that and

they're the ones that are going to be nerding out about like these latencies and all this other stuff and they don't care about the optionality because they will code in a around like the horrible interfaces or the the really hard developer environment because they really really care about that specific optimization. So you kind of have like, I call it like the developer pain is like a Paretoefficient curve. There's like spots on it that you can pick. And they're like people will build for that.

And like the devs will like pick a specific spot of pain that they want to take and they will coat around it. So developers in sauna are like max pain. But they want like a very specific outcome. And like what we're building. provides that outcome, it reduces span somewhere else. Okay, but so I'm sure I just want to bring this up. And the funny thing is actually, I don't even remember if I asked you about this in our

earlier interview. I definitely read it at the time, but you probably saw that, you know, essay that went around in November, the horrific inefficiencies of monolithic blockchains by some in anon, Pellinia. And they argued that validity proofs wouldn't enable blockchains to scale since they imagine And there would be like these validity proven execution layers, then, you know, like Celestia layer for data availability sampling. And they said that, like, ultimately, when those types of things are, you know, being used to help scale blockchains that we will then finally see kind of like global use on mobile devices. And people were saying this was kind of like a veiled critique of Solana.

So, you know, what would you respond to? Yeah. I mean, that one you can just like type in the math of Google. If you want 100,000 nodes around the world, it would take roughly one gigabit of bandwidth to synchronize all of them every 400 milliseconds, like roughly. Right? And one gigabit of bandwidth is not a lot. So if there's like demand for that many boxes to all be synchronized with the Salana state,

we have the technology to solve it. So like from a very kind of like very dumb engineering approach, what he's talking about, that Salana can't scale to a large. large size of replica, large number nodes or large bandwidth. That's just not true simply because of today's technology. Google is offering 20 gigabit fiber to the home. So you expect that to be like 10 gigs probably common within five to 10 years to the home around like North America and Europe.

So you kind of see that like normal development like in networks and computers already get ahead of what folks kind of realize with their brain. It's just technology that's moving at exponential pace is really, really hard to wrap your head around. And we're already there to support, I think, very, very large, very large throughput networks at the hardware level. The hard part is the software. This is like, it takes two days to ship twice as many cores from Amazon. It takes six to 12 months to ship reliable software that can use them all. So I want to dig in here a bit more too, Laura, because I think there's a hidden commonality between Celestia and Solana that has to do with scaling with the future and the unit economics of experimentation in their different fields.

Now, as a starting point, I think what we've just alluded to is different value sets, right? Like, Laura, you and I got started covering Bitcoin together, and then Ethereum came around, and here are two leaders of neither Bitcoin nor Ethereum, and they're both very relevant in today's crypto, and there are different value sets than Bitcoin or Ethereum, right? It's the value sets of Solana. It's the value sets of Celestian. There's intermingling of value sets between different ecosystems, but they're still pretty unique value sets to each ecosystem. And when I look at the future proofing or the future scaling of both of these and the unit economics, one thing that I find really magical is with Solana, you can send value to anyone anywhere in the world for one one hundredth

of a cent. And with Celestea, you can post a transaction to a data availability layer, its data availability layer for roughly one one hundredth of a cent. And as compared to their competitors, they're two to three orders of magnitude cheaper. Right. So it allows for two to three orders of magnitude, more experimentation, which will just bring in more developers and more users, which will continue to reveal crypto's future, right? I feel like in 2021, we kind of got stuck in scale fails for the most part, right? Like, things got too expensive, couldn't expand to the number of users, the demand that was there. And so then, you know, the dollar values of transactions and items and all these things just skyrocketed, got, you know, very bubblelicious. And that's okay,

speculation is part of innovation itself. But then that, you know, that ultimately led to the hopping out of that adoption wave. And then the last few years have been building for, you know, ideally another order of magnitude more adoption, right? And so if you look at Celestia, you know, Celestia's data availability layer, that really underpins everything that people are talking about with roll-ups, right? Roll-ups being execution here that then settles that data to a lower layer. and it could be Ethereum as a data availability layer,

could be eigen layer, or it could be Celestia, and Celestia is, you know, in my opinion, the category defining winner here or likely to be, right? And then the other thing with Celestia on data availability sampling is Celestia can handle more throughput as you have more nodes on the network. And Nick can probably describe this with more technical detail and precision. But a really key component of Celestia is that it continues to be able to handle more as there is more support for the network, which is actually the opposite of what we've seen with a lot of blockchain systems to date.

And similarly, Solana is set up that as hardware continues to scale in its performance and connectivity continues to scale, Solana can scale more and can process more throughput. And so they're both set up directionally to be future-proofed, right, and to handle continued orders of magnitude increases in scale, which is still what we need. Like, none of this is web scale yet, right? Like, we're still just, like, arguably baby steps in these systems. But I do think that Salana and Celestia are some of the most forward-looking in terms of their unit economics and future-proofing of scaling. Nick, do you want to elaborate on the throughput? Yeah, well, I just agree with Chris and that I think there's a deep commonality and shared philosophy between Solana and Celestia, which is that we both believe in abundance and cheap fees and just scaling the base layer of crypto so that we can actually build more things and enable new applications and make existing applications accessible for mass adoption. And I love that because, I mean, we're very aligned on that.

And I think that aside from Celestia, that's just a very noble cause that we should all be working towards. We, you know, we take slightly different approaches. But what that is about is about scaling block production. Right. So like how much data throughput can your network kind of, you know, sustain. But I think there's where the philosophies slightly diverge a little bit is that Celestia cares a lot about verify a And in addition to scaling block production and like the throughput of the network, we also care about scaling verifiability, meaning that like it's really important to us that end users

can actually audit and verify that the chain is following the rules and that everything is legit. Because that is what blockchains have been built for and what makes, what sets them apart from Web 2 in our mind is that, you know, they're verifiable computers. And so I think that. That's kind of where the philosophy is slightly diverge, and that's where it leads to different kinds of architectures where we've placed a really big emphasis on this data availability sampling

because that's what enables our users to run these light nodes and verify Celestia on their phone. Whereas I think Solana, at least for the time being, is okay with having high node requirement. We also have high node requirements for our validator nodes, for our block producer notes, but we want to have a low node requirement option for the end user.

So I think that's sort of like where there's like overlap, but then also slightly divergence. And I think that's maybe kind of related to the meme that I see going on on Twitter of like Solestia. It's like Solana and Celestia kind of combined because I think there's overlap, right? But then, but not fully overlapped in some ways. Yeah, I did want to ask you about that because, well, actually, so this also segues to a question for Anatoli.

Obviously, Ethereum started as a monolithic chain and then it transitioned to a modular one. So is there anything that you could think that might happen that would make you someday think that Salana needed to also switch to a modular structure? Well, the thing is that, like, oddly, there's nothing we could do to stop a developer from taking the Salana user transactions and putting them into Celestia with a Salana state route. and then running a fraud-proof mechanism or a validity-proof to guarantee that proof, and then creating effectively equivalent to a roll-up bridge, like a data availability bridge, from Celestia into Solana, and at the same time, from Ethereum into Salon, there's absolutely nothing like we could do at the protocol level to prevent them from doing that unless we, like, have a broken protocol.

Like, as an engineer, I would want, like, Salon to be flexible enough to allow for that. And that's totally fine. I really want to think of these things as like engineering solutions when there's like a very specific demand. If there's enough demand for assets that are uncelestia to have this kind of style bridge that has this higher level of guarantees, somebody will build it and monetize it. It's just going to happen, right? Simply because there's an opportunity and somebody will go, write the code and it'll happen. So like in my mind, I think we're going to start seeing the kind of like a lot of stuff. of bleeding together between data availability and like, like, based, like, optimized chains

and like what I would say, the execution layer optimized chains. There actually might be like a lot of crossover there and things are going to start looking a little bit like everyone's working together, but everyone's also competing. And that's totally fine, right, from my perspective. I don't think there's, like, the idea for us to modularize the code or not is more like implementation details when we're starting to figure out, okay, we have 400 millisecond block times. How do we get to 200 millisecond block times? Well, like, for us, it means actually separating execution from fork choice. It's still part of the same binary. They're just running asynchronously.

And that very much starts looking like a chain with an enshrine roll-up. And you're starting to like ask, is this a modular design or not? Well, no, this is just like the necessity of life for us to achieve the goal that we want, which is like shrink block times and improve performance there, require us to kind of bar the same techniques. I think this stuff is going to happen naturally across like all chains that have users because we're all a bunch of smart engineers, all these ideas are open source. We're all trying to like improve the product. And it's kind of like this, I think, iterative process.

But I think there are going to be clear differences. And I think like the best example that I can show now is that like you look at Jupiter, which is a routing app that's routing between markets inside one state machine, it can do like a 20 cent trade and spread it between five different liquidity pools. That's really, really hard to do in Ethereum because if you're going, one, Ethereum L1 gas is expensive, but even between L2s, because of the hops and then kind of like the asynchronous nature of that design means you can't have the same guarantees at that low price, right? You kind of have to, like, maybe you can do it at a very large trade, but as you start to shrink things and make things faster and faster, the asynchronous nature of those, like, separate state machines start to kind of show themselves.

So we're going to see this kind of like separation, but a lot of the engineering ideas very much are floating around. Like, one of the best engineers that I've ever talked to is Don Krod from Ethereum and like I ask him questions all the time. how'd you guys solve this? It's very much open and collaborative. And those folks are awesome. The Celestia folks, I think, like, the data availability sampling design is really, really good. If it, like, works on Solana at the bandwidth that we want to achieve,

we would definitely, like, implement it for users because it's just a plus, right? It doesn't take away anything. It just adds extra security. So, like, it's awesome to have folks like that research that side of it. And to layer in here, Laura, the natural module is, of Solana is already happening. Like if you look at a team like Eclipse, which is an SVM roll-up

that settles into Ethereum and uses Celestia for data availability. So it gets to access like Ethereum liquidity and users and wallets, uses Salana execution through the SVM and Celestia Unit Economics

at the data availability layer. So that would be like one thing that's under progress development, you know, with Showtime, probably in 2024, let's say. Or you take a team like code, which is Ted Livingston, which built KIC, which was a massive consumer success messenger

that then got pinched by WhatsApp and so on and so forth. They're building code, a really slick wallet on top of Solana. And, you know, they've effectively built a type of L2 within Solana that totally could probably expand upon with a neat trick they use within the Salana code base. And so to totally point, smart engineers are finding ways to modularize Salana itself to just meet their needs. And so I don't think it has to necessarily even come from Salonacore or already reality is proving out that it doesn't. Okay. So in a moment, we're going to talk a little bit more about modularity versus integrated approaches.

Plus, also give a sneak peek into 2024. But first a quick word from the sponsors who's can make this show possible. Did you know you can buy and sell crypto with tax benefits in an individual retirement account? I trust capital makes this possible. But what does this mean? When you buy crypto outside an IRA, like on an exchange, you face taxes on gains. But in an IRA, like a Roth IRA, gains can be tax-free. I trust capital also has some of the lowest fees in the industry and 24-7 accessibility. Start now and maximize your retirement savings with I-Trust Capital.

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unite with the community, and supercharge your crypto. Details on vaultcraft.io. Arbitrum stands at the forefront of innovation as the premier suite of layer two scaling solutions, bringing you lightning fast transactions at a fraction of the cost, all with security rooted on Ethereum. From Defy to gaming, Arbitrum 1 plus Nova is home to over 500 projects.

And with the recent launch of orbit, Arbitrum welcomes you to build your very own tailor-made layer 3, or, as the Arbitrum ecosystem calls it, an orbit chain, directly on the Arbitrum tech stack. Designed with you in mind, Arbitrum empowers you to explore and build without compromise. Propel your project and community forward by visiting Arbitrum.io today. Back to my conversation with Chris Anatoly and Nick. So you described that Eclipse project, which you said settles into Ethereum, but is an SVM project. So do you think that we will see more kind of like modular Ethereum apps moving to SVM or more monolithic slant apps moving to Ethereum? And this could be for anybody.

Or maybe it'll be equal both directions. Well, I can just kick it off with the higher level. overview, which would be like, if you've written an app for the SVM, you can't just port that to the EVM, right? Very different process and environment. And so what's something like Eclipse does, because, you know, the execution layer uses the SVM, you can take an app that you've built for Salana, for Salana users. You can run it in Eclipse, but give that access to Ethereum liquidity and wallets. Right.

So for the developer that is within the Salon ecosystem, it's easier access to Ethereum users. Right. And then, I mean, totally went through a lot of this when he was getting Salon off the ground. Like to get teams to move from the EVM to the SVM was, you know, harder than pulling teeth. It was practically impossible, right? Because they built for the EVM. And then you have to go through a complete rebuild to get to the SVM. Now, what's super interesting, what happened as a result is you had a.

bunch of homegrown teens building for the SVM from the ground up. And now that's created its own organic set of diehards, both on the developer and user side within Solana. Now, I think here's something that's going to get really interesting. It's my hypothesis that the SVM will have more users in aggregate than the EVM in a few years. And so then you might have people who are like, oh, wait, I want an EVM environment. You know, I want to be able to pour. You know, I want to be able to port my Ethereum app to get access to salami users. So that's actually the reverse of what we're seeing with Eclipse right now. But in order to get to that state, we need a couple orders of magnitude more users to come online on chain. And wait before we continue with the discussion.

So Chris, can you explain why it is that your theory is that we'll have more Salana users in a few years than the Ethereum users? Because in certain parts of Twitter, that will definitely be fighting words. Well, and I said SVM versus EVM. Oh, okay, right. And I say that specifically. I just, the Salana Virtual Machine is, you know, it's paralyzed, it's much more performant. You do have teams like Monad, which are working on a complete redesign of the EVM to parallelize it, and it's a very credible team. And it's also a team that plays all that works with that I'm impressed by regularly.

So, like, there is work to modernize the EVM. But from a user experience cost performance perspective, SVM is clearly. superior right now to the EVM. And so I think that it's a lot easier to onboard users to play with on-chain applications. When I travel internationally, I used to tip people in ETH. Well, actually, it was Bitcoin and then I would tip them in ETH. And now I tip them in Seoul. Like, download a phantom wallet. Let me send you value in Seoul or USDC. And it's the experience of like, I click a button and it, we have the two phones down, right? I click a button. I click a button. and pretty much instantly the value shows up on their phone.

It costs me 1,100 of a cent. And it's the dream I've always said to people for as long as I've been in crypto, of like send value for practically free instantly to anyone anywhere in the world. And so the SVM is part of allowing that to happen. The EVM could get there, but it needs more work to get there. And until it gets there, I think the SVM is going to continue to gain share on EVM. Now, on the developer side, the EVM still has massive share over the SVM. I want to say like 95% EVM to 5% SVM.

So this is a borderline, certainly a year ago, it was a preposterous thing to say. I think now people are like entertaining it a bit more. But if the SVM gets some breakout applications, you know, and I'm talking like 100 million on-chain users, that's going to start to pull a lot of developer attention and curiosity. And it only takes a few of those for people to go, wait a second, like SVM's also got to be, you know, within our design per view or list of potential choices. All right. So we're going to make a segue to our 2024 predictions portion. However, there's a bridge question, which it was actually something that was submitted by Wayne Vaughn on Twitter because I sought questions in advance.

And he asked, what's your view on the latest wave of startups building on Bitcoin? Are these founders at a disadvantage over companies building on Ethereum and Solana? Or do they have an advantage as Bitcoin gains mainstream acceptance as the leading digital asset? Well, I just answered so I don't want to hog the airtime, but I have a view. I think it's really, really hard to build things on Bitcoin that lower fees without effectively building a side chain. And like you can build a side chain, but you could just use Solana and bridge Bitcoin into it or. Celestial, right? Or whatever. And that's like, I think, I think that's basically kind of like my view is that like folks are going to be successful there, but it's almost like building for the

Ethereum layer one for the very whale like environment where the fees are high and you're, you're kind of just trying to make money off like very high value trades. That's totally feasible, right, to have a company there that's successful. But it's not something that I would expect to scale to the 100 million users. we all want to join, right, the ecosystem? I think that modularity has somewhat revived the Bitcoin community. You know, people started seeing Bitcoin not just as, you know, this layer to transfer a digital goal, but as more of a data availability layer where they could, you know, post

NFTs, they can even run roll-ups. So there's a few teams I'm aware of that are actively seeking to run roll-ups on Bitcoin, even like an EVM roll-up, for example, which is kind of, of ironic. And I think that's really exciting, but I do think Bitcoin has a lot of fundamental constraints that don't make it very suitable for being a data availability layer or a settlement layer because the data availability throughput is just extremely low and there's no real settlement functionality. I know there was like a paper recently explaining how you could actually verify execution on the Bitcoin layer one. I'm blanking on the name. That's pretty exciting.

Because then BIT VM. Yeah, if that works, that's pretty exciting and could actually turn Bitcoin into a settlement layer, which I think would probably be the best outcome. Although I don't know if the Bitcoin Maxis would be happy with that. I know. Earlier when you were talking, I was going to interject what you were saying about putting NFTs on that, to them an exploit. Yeah, it's wild. And for me, this is so full circle because I'm really excited to see innovation happening on Bitcoin.

again, and I feel like early Bitcoin in ethos was the most innovative and the most open-minded. And over time, it's actually in a way become more conservative and more close-minded, which is painful to see so early in an adoption cycle. And I still think that even if it goes in that direction, Bitcoin will just become a tradfai asset and it'll still be valuable to the world, enormously valuable to the world. It's just like, you know, this unchanging mirror or this liquidity sponge or how. you want to theorize about it that, you know, just provides you a fixed share of ownership of some asset. But I think it gets much more exciting. And Bitcoin needs to solve for its transaction

fee model over time. And this is where I think Maxi should really open their minds because as Bitcoin supply inflation ratchets down, it needs to supply inflation revenue for miners with transaction fees. And, you know, as digital gold, I don't think that alone cuts, cuts it for, you know, providing the necessary transaction fees. So what we've been seeing with Ordinals over the last roughly year now is super exciting and it's providing a lot of fee revenue for minors. And that's key for what the maxis want, which is, you know, Bitcoin being digital gold. You know, there are a number of teams working on, on L2s, as we've alluded to. I believe that you need an op code change or two to create a true L2. So, you know, a true L2 being not something that has

its independent security parameters, but is actually using the L1's security. So right now, everything is a side chain. And, you know, we work with stacks and Munez's been working on this for a long time. And he wants stacks to be an L2. But, you know, right now it is, it is a type of side chain. So getting Bitcoin L2s with expressivity. would be amazing. And those L2s would actually be more value add to Bitcoin than Ethereum L2s, because Ethereum L2s just scale the expressivity of Ethereum as is. And you can't have eclipse like things where you expand the execution environment. But Bitcoin scripting language is so limited that to have expressive L2s would be both increased scalability and, you know, majorly increased

expressivity. So that's huge. Now, one of the issues I've encountered with a lot of these teams building within the new Bitcoin ecosystem is like they don't get as much cooperation from the Bitcoin whales as you would expect. Because like in Ethereum land or Solana land, a lot of those whales are on-chain native. Like they came there because they want to experiment. They're excited by this type of innovation. You know, they want to support an NFT project or a new defy project or whatever. Whereas a lot of your like OG Bitcoin whales, you know, that coin is in deep, deep cold storage. It's in glacial core storage, right? It's not being touched ever. And so like, Dumer. Actually getting, yeah, it's in Dumer storage. And so like, you know,

getting access to that coin to like bootstrap liquidity of Bitcoin DFI or whatever it might be is much harder to do than it is within Ethereum land or Solano land. And so I'd say there's more resistance from the OG group than Ethereum or Salana has to deal with. And that's friction, right? And friction slows down. momentum. So those are things that like the Bitcoin ecosystem has to work through. But I am really excited actually and investigating Bitcoin again as as a VC. Whereas I kind of took a hiatus, I would say for for a period there just being like, you know, people aren't aren't really open to working with placeholder in the ways we'd want to work with them over the past, I don't

know, five years or so. Yeah, it's so interesting, actually, that we're talking about this, about kind of tech coming back to Bitcoin because I was going to ask you guys what this next bull cycle will be about. You know, in 2013, it was Bitcoin, simply because that was the first crypto. But to me, and, you know, correct me if you think I'm wrong, but the last two cycles, the speculative mania for each of them was more, in my opinion, tech-driven. So in 2017, 2018 was the ICOs in 2021. It was more like NFTs, although defy kind of led into that. But in my opinion for this cycle, it feels like actually this imminent launch of the spot Bitcoin ETFs is actually putting Bitcoin front and center for this bull cycle.

And this is even before the having has happened. So I was curious what you thought would be the main driver in this bull cycle or potentially, you know, you could say like, oh, it's the beginning of the super cycle. Like we're kind of leaving this era of, you know, pulling bear markets. I don't know. The super cycle's dead, Laura. I never bring that.

That one needs to stay in the crypto closet forever. I don't know. You guys saw Kyle Davies tweeted something about that and like everybody responding was really pissed on. But anyway, point at point is, though, it's just fascinating. It goes back to what you're saying, Chris. Suddenly, you know, it felt like Bitcoin was not the center of innovation, but then all of a sudden it does look like they're the catalyst for this full cycle, which is interesting.

So comments, thoughts? Sure. Well, I can kick it off. I guess this isn't going to be the super cycle, but it's going to be a fantastic cycle. And I just think of it as like increased expansion across all dimensions, right? Users, value, integration, relevance to everyday life across the globe. Certainly the Bitcoin ETF is a big deal because it's going to further integrate. integrate Bitcoin and crypto with the real world, though I think increasingly people will

realize that blockchains represent the real world of the digital. You know, with Bitcoin itself, like BlackRock and Ark Invest and, you know, these leviathons of traditional finance, if they have a Bitcoin ETF to sell, they're going to go and train all their wealth advisors to educate all their clients, which is tens of millions of clients on Bitcoin. And then those people get curious about Bitcoin and then they'll probably get curious about the next thing. And then there'll be an ETH ETF. And it just keeps going, right?

This stuff never stops. So from an education perspective and an awareness perspective and a capital flow perspective, the Bitcoin ETF thing is super relevant and has been a long time coming. This cycle is also going to coincide with increased liquidity conditions globally and likely lowering rates. It could be rocky depending on what happens with inflation. but, you know, we've hit more or less peak rates. And I love this comic of someone asking Uncle Sam or the Fed, hey, why do you raise rates?

And he says so that I can lower them again. And, you know, and like I think before this conversation started, totally was talking about value as the inverse of the Fed Funds rate, you know. And there's a reason for that. The Fed Funds rate discounts all value. And so the lower that rate goes, the more value itself kind of expands. and that's necessary for capitalism. So we're going to go through this like Bitcoin ETF inflows cycle or expansion at the same time that rates are coming down,

the same time that liquidity is increasing. And then probably most importantly or most excitingly to me in all of this is if I just look at fungibles versus non-fungibles, 2017 ICOs, that was static fungibles. That was really capital formation. And it laid the foundation for people to create dynamic. fungibles or really what became defy in 2020 and 2021. And then I think that matures into what I've been referring to more as the internet financial system.

So it's like you go static, you go dynamic, and then you go mature, like mature dynamic. And so I think that like fungibles and defy, we start to see like a lot of mature dynamic finance at institutional scale in the years ahead. And that's, you know, going to be on Solana, on Avalanche, on Ethereum. And great thing about Celestia is actually Celestia. it sits at the base of like whoever wants to post DA transactions to it. Right. So and we can come back to that.

Then with non fungibles, you know, non fungibles are basically a cycle behind fungibles because they're more complex. They're kind of like they're even more in a way claimable to be valueless, you know, just the dumb JPEG or whatever. It's like an even more arbitrary illustration of value than even Bitcoin was when it was first, you know, But with non-fungibles, it was like 2021 was static non-fungibles, right? It was what 2017 was for fungibles.

And so they weren't that interesting. It was capital formation. It was, you know, six-figure monkey JPEGs. But it raised a lot of money to then build dynamic non-fungibles now. And so I think the years ahead, we're going to see a lot of dynamic non-fungible experiences. And, you know, the one that everyone has talked about forever, and I think we'll finally materialize, we'll be gaming. But there's a lot of really cool experiments,

even if you just look at DRIP on top of Solano, which is basically giving away non-fungibles as a type of loyalty or creator audience mechanism. And they can do that because it's low cost and scalable enough for them to do that. And it also starts to become a foundation for a new type of social media or a form of interaction between humans. And so just to recap, I think it's, you know, the internet financial system, you know, so that's mature, dynamic finance. And then I think it's

dynamic non-fundables. And it's, this is all happening on quite a few more innovation environments than we've ever had before. But wait, Chris, the way you described that, it wasn't clear if you were saying that was going to happen in this cycle or just at some point in the future. But do you think this cycle? The next few years. And it totally, Nick, what about you? What do you think will be kind of the focus of this bull cycle. I don't know what else I can add to that. Chris kind of covered everything. What I would like to see is like as part of this expansion of like usage, I really want to see

like boring stuff working like payments. Like I want to see like Salon to pay or whatever like some crypto payments thing to start competing with traditional finance rails because I think to me that's like one of the key unlocks. If we can get like a decentralized version of WeChat out with payments and kind of integration into finance, you start, I think, separating users from the traditional financial system. And it's like everything that they're doing is from a single app, like a super app. We can do payments. They can do whatever. But I think like the first use case that has to break out is the payments one. So like in a way, it's almost like we're in a like decentralization allows for unbundling.

of all of these financial services. And we're like, I don't know if we're maximally unbundled yet, but it feels like there is like five competitors for every function of every part of finance across of DFA. And like we're going to go back to this bundling stage at some point. And in my mind, it's going to be like decentralized version of WeChat that like catches fire. There's a billion people using it.

And that thing is actually, in my mind, probably going to be worth more than the base layers that it's using. You're going to see that kind of flip where people are going to realize, oh, yeah, the applications matter because that's where the customer is. That's where all the funds are flowing through. And the base layers will be more like info. So that's my thought. I don't know.

I don't know if it's going to happen like 24, 25 or whatever. But I feel like that's maybe the second stage of like development. So I think this next cycle, I think a big theme of it on the technology side is going to be this modular versus monolithic thing. Because we've been beating the drum about modular for the past three plus years or so. But it's always been in theory. It's always been, well, when it's built, and then when, when roll-ups are functional, all these things, when we have a scalable data availability layer, right? Now we're actually reaching a stage where the modular stack is maturing. It's probably like, you know, in Chris's analogy, probably this is the first wave of the modular stack.

It might take multiple waves for it to really reach full, like, dynamic maturity. But I think we're finally at the stage where it goes from theory to practice and we can see the modular stack working. We can see people building stuff. And we get to show what, so the world, what, you know, modular blockchains are capable of and all the unlocks that they can provide. So I think of sort of this, you know, Celestia kind of thing. where it's like, Swanah's leading the charge on integrated and Celestia of Ethereum

and all the Ethereum L2s and this broader modular ecosystem are carrying the torch for the modular side and we'll see, you know, where do the users and where do the developers land? And that's still, you know, to be determined.

But in general, I think it's going to be really an exciting time where we're going to be trying out new use cases. And it's similar, to like the launch of Ethereum originally where before Ethereum, if you wanted to launch an application, you had to build your own blockchain essentially. Like you had to, you know, if you wanted to do like coin, you had to issue like when it's basically just a token, right? When Ethereum came around, you could just issue your own token. You could write a defy app.

All these things became a lot easier. And I think modular blockchains enable a similar thing at the, at a deeper level of actual like protocol and like execution layer innovation. And so I think it's going to just open up a whole new explosion of experimentation that will, in the same way that Ethereum led to the discovery of defy and NFTs and all these things, I hope that we discover new, net new, popular apps with some level of product market fit. And I think, you know, obviously payments is a big one that I'm excited about. Like I totally said, I think gaming and social apps have this built-in virality to them. or if you put the right incentives in place, they could really spread quickly. So I feel like they have a high probability

or the potential to scale to, you know, hundreds of 100 million users or something like that. And I also think a big unlock is what Coinbase and WorldCoin have been doing in terms of identity, because I think a lot of applications are still kind of hung up on the fact that you can't have civil resistance, you can't really have a notion of identity or reputation. And when some of those things come online,

And I think that will be another big unlock. But it's going to be, we're still so early. You know, when I got into crypto in 2017, I thought, wow, I'm so late. You know, everything is like built and done. And like, the more, the longer I'm in this space, the more I'm like, wow, this is going to take a long time. But, you know, it's going to be a fun journey the whole way. Yeah, actually, this reminds me because honestly, I have never fully clarified what

so LESIA is. So is it just what Anaswilia described earlier? Why is it that people keep tweeting about this? Chris? Well, I mean, Crypto Twitter loves its memes, right? And like Saloon of Ax was a thing last cycle and Celestia rolls off the tongue nicely.

And within that, there's kind of allusion to like Ethereum potentially being stuck in the middle there. Or like Solana is at the far end of integrated and Celestia is at the far end of modular. And they kind of think of Ethereum as being like, like modulithic. You know, it's like, and so I think that's, that's where people refer to Solestia because they're the like two new, full-on approaches.

And what I really admire about the Solana team and the Celestia team is they're just both maniacally focused on the things they really care about with like no compromises in the direction of what they care about. Now, to other people that would be like, well, you're compromising on this and this and this. And they're like, yeah, but we don't care. because we're like singularly focused on, you know, for for Solana, it's really performance. And I think of for Celestia, it's really availability, right? And so that builds great things.

I was going to ask, though, I had a question for Nick and a question for Tolly. My question for Nick, if we think of Ethereum as modulithic, like, do you see a world where Ethereum can get to a place where it competes with Celestia on cost or data availability? or is that something where it's like it just wasn't designed for that world and Celestia was purpose built for that world? They're steering like a $300 billion ship, right? Yeah. So anything is possible. It's just that if I was one of those engineers, I'd probably be moving even slower.

Like that's like the amount of like risk that they're taking with every change is like very, very large. So I think like honestly like folks. way underappreciate the merge and the amount of progress that Ethereum has made over the last few years. And things are moving, I think, in the right direction. I think design-wise, like, dank sharding could totally scale to a point where we can dump all of Solana's data into it. Now, whether, like, the economics and the social factors around, like, increasing stuff within Ethereum would, like, allow for that is, like, a totally different question. But I think they're on the right track. It's just really hard, man.

I don't envy them in any way. And what do you think? Yeah, I largely agree. I think it's pretty commendable that the Ethereum community has continued to be able to iterate and innovate, right? Even at the scale that they're at. Look at what happened to Bitcoin. It's totally ossified the protocol there. And Ethereum has resisted that.

And so I give them a lot of credit. But like Anatoly said, when you're steering a $300 billion ship, it's just very hard to make any changes. And there's so many dependencies. It's not just you and the value of your chain, but all the things that are built on top of it. And I think, you know, modular to monolithic change is a much bigger change than from, you know, proof of work to proof of stake. And it's like much more like core and touches more things in the protocol. also it's a more ambitious undertaking. The design for dang sharding and all the work that's gone into it is top-notch.

Like the researchers and the engineering team in the Ethereum ecosystem are, you know, some of the best. But it's just the rolling it out is going to be very, very difficult, I think. So it will take time. I do think I do think they get there. But I think it will just be a little slower. Yeah. Yeah. And totally, my question for you was, I remember.

about a year ago, I think we met in New York City. And I think I asked you, are you ready for Seoul to be at 1,000? And are you ready for crypto to be at 10 trillion? And I think you started sweating. Yeah. That makes me swell, man. That is a scary thought. But my question for you on this podcast is, like, are you worried about Solana becoming a victim of its own success in a way like Ethereum was in 2021. Yeah, I actually experienced this with Brew, which was the OS that we built for Qualcomm. It was like top, top engineering, the coolest thing. We had the best, like, record mobile downloads.

It was like the first real mobile platform. And we had like the design for what an iPhone should look like, like in our hands. And like Verizon was like, nope, we know what we're supposed to do. And like they kind of pushed back on us. So we didn't have like the, it was too big to like pivot, but like too small to like beat Apple once they shipped. So we kind of like actually am more worried about like that middle ground. I think in some ways like because of the singular focus that we have on like performance,

it's much easier to align all the engineers across like Firedancer and Jito and like labs. And like this design change makes the change faster. that means it's high priority or like stability is the highest priority but then like what are we going to do next? It's like make this change because it unlocks the next like performance thing. So I think we actually have like pretty good culture there

with like a singular focus to drive stuff forward which has been working so far. Again, you know like as things mature, right, like you really really have to be far more cautious about changes and everything else. Right. So you kind of like I think really. cycle, slow down, but you also have more resources, too. So, like, I'm hoping that we can,

you know, like the ecosystem can keep that pace going. But it's a scary thought. Yeah. The fire dancer, like, getting a second implementation out, so there is no, like, single point of failure is, like, the highest priority for, for, like, all of us right now. Well, speaking of things that make you sweat and single points of failure, listeners should know that the day that we're recording is the day that began with a widespread vulnerability that hit a huge number of decentralized apps across multiple blockchains. This had to do with a former ledger employee who fell victim to a fishing attack and that enabled the hacker to update some software by ledger called Connect Kit. I know you guys who are developers probably like cringing in my

description, but it connected to all these different apps, you know, across multiple blockchains. like I mentioned, and they uploaded malicious code there that would drain users' wallets. So obviously, this, I mean, this was just so chaotic because it wasn't even, it just caused a lot of confusion and pandemonium that morning. And I just wondered what your thoughts were on what the industry needed to do going forward because for this technology to be rolled out to masses of people, I don't think those kinds of things can really keep on half. happening. So what are your thoughts there? Yeah, this is like one of those stomach churning things

because it's a very targeted fishing attack and it's scary, right? Like you basically like I have to go through the whole like round of security like updates for all your employees, make sure that they're like behavior and all this other stuff. Like people get lazy. You get like complacent when something doesn't happen and it's just like frightening. I know, but what's crazy to me is he doesn't work at ledger anymore. Like that is the other crazy bit. But anyway. Yeah. I think like technology is improving. There's basically, I can tell you like, oh, just use fuse wallet that just shipped like two months ago. That is an on-chain wallet and you can have multiple hardware devices with different supply chains as your signers. Yeah, the stuff is already there. And not only there,

I mean, like it's live. It's just it takes time for that solution to. to become so widely spread that people are done with these attack vectors. But for all of these things, there's a fix. It's just getting that fix globally propagated to everyone. That rollout is really, really tough because it requires, like, users to change behaviors and, like, a whole bunch of kind of bounce stream updates. But, like, I don't think any of these problems are insurmountable over the long term. It's just a bumpy ride, unfortunately.

Yeah, I think we're just early, right? and the price of being early is that there's risk. And we tend to talk so much about just like the protocol stuff, but across the whole stack, everything is so new, including wallets. And, you know, it's inevitable. But each time there's a hack, right, I think it's progress because it's exposing something that needs to be fixed. And once it's fixed, hopefully it doesn't come back.

And so I think of it as kind of like we're kind of putting up a bug bounty, right? maybe not intentionally, but there's just like an ongoing bug bounty to like, you know, hack all of us. But it's a very anti-fragile system at the end of the day where it's open source and we're gradually marching step by step towards something that's extremely robust and hopefully can be the foundation of, you know, the global financial system and more in the future. But there's no shortcut. It's just going to be, you know, getting hacked. I mean, I guess like to my mind, though,

If I think about where we are at this moment in time where Bitcoin, spot Bitcoin ETFs are about to launch, I just feel like so much money is going to start coming into the system. And there's going to be a lot more attention being paid. And more people will have their value kind of tied to what's going on in the crypto ecosystem. I feel like it's going to, I feel like very soon it's going to feel quite different in terms of the spotlight that's on this space. I could be wrong, but that's just what I think.

Like, I feel like you guys are saying like, oh, like it'll work itself out. And I'm like, no, no, no, no, no. I have a feeling that very soon, let's put it this way. If this were to happen in 2024, I feel like the media circus around it would have been much bigger, you know, post Bitcoin ETF launch. So I guess, yeah, I just don't know if that explanation will suffice for the people that are about to come into the space. Yeah, absolutely.

It's like, it's my biggest fear is that like, I think it could, like a big hack could set the space back for years. So hopefully that doesn't happen. But like, yeah, that's like the scariest thing. I mean, everyone's trying to be vigilant, all the developers and companies involved. And like, luckily, there's so many of them, but there is no, like, kind of singular point of failure for the whole crypto industry. But, like, yeah, each one of these events is a reminder of, like, to be more vigilant. I guess I think of this as, like, money as technology. over time, right? And, you know, different heists of different sorts kind of have their era, and then they get fixed. You know, like bank heists are much less in vogue than they once were.

And that's partially because so much of the value has moved out of the bank and, you know, into, you know, ledgers of different sorts. And then, you know, right now it's like there's a lot of value and the transactions are irreversible on blockchains. And so blockchain heists are in vogue. And then to the next point, that forces everyone to look at that problem and to work towards solving that problem with more urgency. A team that we also work with, Agorik has, you know, hardened JavaScript to be in a number of ways and has shifted towards an object-oriented program environment. I think it's also something that Sui has done with Move and I think Tully and Nick would be more suited to explain some of the benefits they're in.

But I think there are development environments or ways in which the tools developers you use will be hardened in a way over time to protect developers from themselves. And then also then to Tully's point around Fuse and some of the available wallets out there, it's making the available super secure wallets. extremely easy to use and fuse for what it's worth is really easy to use but like it's another like user or two hack away from like being like oh no no this is just the thing you use and it's as easy as this and it's like carlotta prez would call this a new default right like the the right hygiene and the right ways to use blockchains have still not become in mass adopted enough to be a new default where it's like just another example. I would say everyone in crypto uses local 2FA now.

Like that's a new default within crypto where outside of crypto it's not. But I think everyone will actually come to a place where they need to use local 2FA because we're all getting so many like spam like SMS attacks and email attacks and whatever. And so like all of this is in a weird way going to come more in crypto's direction. And I think we will be best suited to provide the right solutions. And so I guess I don't lose sleep over there. as a Promethean, that's like we're going to innovate our way out of it.

And if crypto can't innovate its way out of it, then like the rest of the world's probably screwed too, which just gives us no choice but to innovate our way out of it. All right. Well, so our last question will be if you each want to make one prediction for 2024, could really be about anything, but it has to be crypto related. So. Fire dancer on Maynab by Breakpoint in Singapore. We'll see.

50-50 odds but I feel pretty good about it. I guess I need to make a qualification to my question because I don't know if it could be about something where like you you probably have like enough knowledge about that that you could make it. So it should be more like broad based for the industry. Can we expand it to next expansion? Yeah.

So it's just like in the year two, three ahead. Yeah. Okay, sure. Go ahead. A AAA game. that is like purely NFT based like to the level of Star Atlas from the ground up is going to be like,

I think have like 15 million users when the next three years. And not like eventually fizzle out. Yeah, yeah. But be sustained. Okay. Yeah. Okay.

Chris. I guess I would go a on-chain application with 100 million monthly actives and crypto users globally crosses the billion dollar mark. And crypto as a whole, crypto assets as a whole across the 10 trillion mark. Wow.

Okay. At some point in the next. Few years. Before the next bear market. Okay. Nick. My prediction is that we're going to have over 10,000 plus new rollups deployed, whether that's on Celestia or any data availability there.

I think we're just going to see an explosion of L2s. And I say this with confidence because, there are test nets out there that already have 10,000 plus roll-ups deployed. And obviously, some of them are not every one of those is going to be like an arbitram or an optimism, right? And that's also part of the thing is that people need to start changing their mentality around what a roll-up is. And in some ways, it could just be like a simple app. They don't have to be this massive ecosystem. But I think we're going to see Cambrian explosion of people experimenting with modular stack

and numbers of roll-ups that, like, you know, are hard to fathom right now, or just it wouldn't make sense. But I think that's inevitable in the next cycle. Okay, super interesting. All right. Well, where can people learn more about each of you and your work? I'm on Twitter at Nick White, but with an 8. And we are at Celestia org on Twitter.

I'd say those are the best places. And our website is Celestia.org. I am Anatoly. I'm A.E. Yakovenko on Twitter or A. And you can go to salano.com to find everything about Salana or just, you know, follow me on Twitter. And I'm C Berniski on Twitter, and placeholder's website is placeholder.vety. Perfect. Well, it's been a pleasure having you all on Unchained.

Thanks, Laura. Thanks, Laura. It was a ton of fun. Thanks so much for joining us today to learn more about Chris, Anatoly, Nick, and the debate about modular versus integrated blockchains. Check up the show notes for this episode. Unchained is produced by me, Laura Shin. without from Kevin Fuchs, Matt Pilcher, Wynarvanovich, Megan Gavis, Nelson Wong, Shashonk, and Margaret Curia.

Thanks for listening. Unchained is now a part of the CoinDesk Podcast Network. For the latest in digital assets, check out Markets Daily seven days a week with new host, Noel Acheson. Follow the CoinDesk Podcast Network for some of the best shows in crypto.