Berachain 101: Everything You Need To Know | Founder Smokey The Bera

In this episode, we speak with Smokey the Bera, co-founder of Berachain, about the project’s newly launched mainnet and its innovative Proof of Liquidity model. The discussion unpacks Berachain’s unique three-way relationship between its app layer, validators, and a nontransferable governance token that reimagines traditional proof of stake systems. Smokey explores both the potential benefits and the challenges of this economic experiment as it seeks to reshape blockchain economics. We also spotlight our sponsor Morpho, whose cutting-edge integration of DeFi with traditional finance is driving new opportunities in the market. ------ 📣 MORPHO | GO-TO LENDING INFRASTRUCTURE https://bankless.cc/Morpho ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo 🎮RONIN | THE FUTURE OF WEB3 GAMING https://bankless.cc/Ronin ------ TIMESTAMPS 00:00 Start 05:10 How Did Bera Come To Be? 09:43 Starting With Community 12:09 The Memetic Roadmap 14:43 Proof Of Liquidity 20:41 The Triangle Based Loop 33:26 Liquidity Provisioning 35:21 Discovering Equilibrium 38:28 How To Grow Market Share 43:53 Bera and Monad 47:13 Addressing Criticism 53:51 2025 Roadmap ------ RESOURCES Smokey - https://x.com/smokeythebera ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ https://www.bankless.com/disclosures%E2%81%A0

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04David Hoffman?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. And today on Bankless, I'm talking to Smokey the Barra, which is one of Berachain's creators and co-founders. Berachain is not something that I have deeply investigated prior to doing this interview, but since its mainnet is now launched and the project is real, I felt like it was a good time to get Smokey on the show and have him teach me directly about what Berachain is and what its core innovation called Proof of Liquidity brings to the industry. Before we get started, though, a message from our friends and sponsors over at Morpho. Morpho is a borrowing and lending application on Ethereum, also on Base. That is the first and only DeFi protocol that has been integrated into Coinbase.com, which is a pretty crazy concept, but if you're a longtime Bankless listener, you know this concept as the DeFi mullet. Fintech in the front, DeFi in the back.

• 0:49David Hoffman?

  Coinbase is using Morpho to offer its users Bitcoin-backed loans, which is actually how I'm also personally using Morpho as well. It feels good to have an app that I'm an ongoing customer of to sponsor the podcast, so I appreciate you, Morpho. There is a link in the show notes if you just got peaked, so go check them out. Proof of Liquidity from Berachain, I think it's a pretty interesting concept. I'm definitely putting it into the category of valid economic experiment with uncertain and unproven outcomes. I think the success of Proof of Liquidity will have to come with some relatively heavy top-down control and influence in order to make sure everything is balanced correctly. I'll quickly illustrate Proof of Liquidity. Smokey the Barra, we spend like 20, 30 minutes on this in the podcast, but just to really prime you as you go into it, I'll quickly illustrate Proof of Liquidity

• 1:33David Hoffman?

  has a three-way relationship, like a three-party flywheel between, one, Berachain's app layer, two, the validator set, like the stakers, and three, a new economic actor that holds a non-transferable Berachain governance token, so an additional token that is a core part of the blockchain. That's the big new thing that breaks the model for the typical proof-of-stake blockchain. In addition to the regular currency of the blockchain, like the ETH for Ethereum, which is the Barra for Berachain. In addition to Barra, there's an additional governance token called BGT in the mix that helps direct economic resources between validators and the app layer. Is this additional mechanism a missing piece of the puzzle that truly unlocks economic resourcing for the blockchain economy?

• 2:17David Hoffman?

  Or is it a chaotic introduction of an unnecessary variable that undermines the security and sustainability of the Berachain system? I don't know, only time will tell. But until then, I'm here for it. So let's go ahead and chat with Smokey the Bear from Bear Chain right now. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Ondo Finance is leading the way in the tokenization of real-world assets with a mission to accelerate the transition to an open economy by building the platforms, assets, and infrastructure that bring financial markets on-chain. With Ondo, institutions get seamless access to tokenized finance, while on-chain users gain access to institutional-grade real-world assets like never before. By bridging traditional finance and the blockchain economy, Ondo is unlocking liquidity, efficiency, and global access, reshaping markets for the digital age.

• 3:02David Hoffman?

  As the leader in institutional adoption, Ondo Finance is the gateway to the trillion-dollar tokenization revolution. Institutional-grade finance, on-chain for everyone. Cello is transitioning from a mobile-first, EVM-compatible Layer 1 blockchain to a high-performance Ethereum Layer 2, built on OP stack with EigenDA and one-block finality, all happening soon with a hard fork. With over 600 million total transactions, 12 million weekly transactions, and 750,000 daily active users, Cello's meteoric rise would place it among one of the top Layer 2s, built for the real world and optimized for fast, low-cost global payments. As the home of the stablecoins, Cello hosts 13 native stablecoins across seven different currencies, including native USDT on Opera MiniPay, and with over 4 million users in Africa alone.

• 3:45David Hoffman?

  In November, stablecoin volumes hit $6.8 billion, made for seamless on-chain FX trading. Plus, users can pay gas with ERC20 tokens like USDT and USDC and send crypto to phone numbers in seconds. But why should you care about Cello's transition to a Layer 2? Layer 2s unify Ethereum. L1s fragmented. By becoming a Layer 2, Cello leads the way for other EVM-compatible Layer 1s to follow. Follow Cello on X and witness the great Cello-havening, where Cello cuts its inflation in half as it enters its Layer 2 era and continuing its environmental leadership. The Arbitrum Portal is your one-stop hub to entering the Ethereum ecosystem. With over 800 apps, Arbitrum offers something for everyone. Dive into the epicenter of DeFi, where advanced trading, lending, and staking platforms are redefining how we interact with money.

• 4:30David Hoffman?

  Explore Arbitrum's rapidly growing gaming hub, from immersed role-playing games, fast-paced fantasy MMOs, to casual luck-battle mobile games. Move assets effortlessly between chains and access the ecosystem with ease via Arbitrum's expansive network of bridges and on-ramps. Step into Arbitrum's flourishing NFT and creator space, where artists, collectors, and social converge and support your favorite streamers all on-chain. Find new and trending apps and learn how to earn rewards across the Arbitrum ecosystem with limited-time campaigns from your favorite projects. Empower your future with Arbitrum. Visit portal.arbitrum.io to find out what's next on your Web3 journey.

• 5:10David Hoffman?

  Bankless Nation, I'm here with Smokey the Barra. Smokey the Barra is the co-founder of Barra Chain, which is a brand-new Layer 1 on the scene, which, a different flavor, a different flavor than I think we've ever really seen before. Smokey, welcome to the podcast.

• 5:23Speaker 01

  Hey, man. Good to be here. Thanks for having me.

• 5:26David Hoffman?

  I think just to really set the table, I kind of need to hear the whole Barra explanation. Barra Chain and Barra has been positioned as like a more memetic-styled Layer 1, which is not a style that we've really seen before. Can you just kind of elaborate on this unique positioning that Barra Chain has?

• 5:44Speaker 01

  Yeah, for sure. I'd say that the memetic positioning was a little bit of a happy accident, and we'll find out if it's happy over the long term, but we'll see where we are. It actually started because Barra Chain didn't really start off as a chain. It started off as a whole bunch of NFTs that bears with bongs. And that, I think, gives it some somewhat hilarious, somewhat cursed roots. For deep context, myself, my co-founder Papa, had been in the space for close to a decade now, but most active since 2015, 2016. Then again, DeFi summer. And then again, as NFTs and stuff like that became fun again, or DeFi 2.0 and 21. And as we were hanging out in a whole bunch of these DeFi native discords, we found that, you know, NFTs were getting interesting again and a little bit beyond like the 10,000 pictures of monkeys, et cetera.

• 6:29Speaker 01

  Stuff like Parallel Prime and whatnot was starting to actually see, I'd say, more nuanced applications. And we said, hey, it'd be kind of cool to see what happened if we like took an NFT project and saw what we could do with it. That first just completely started out as a bit of a joke and just 100, you know, NFTs of bears with bongs, aptly named the bong bears. Then we decided to make these bears effectively multiply or rebase. If those are, if you from back in the day are familiar with sort of on the style mechanisms, certainly nowhere close to four or five figure, you know, APYs, but rather just sort of, you know, multiplying collections that reduced scarcity and price over time and allowed more and more folks to enter that ecosystem. And what was interesting, I guess, is that having come from these DeFi native discords and, you know, sort of like your Olympus, Frax, Curve, Alchemics type communities, you

• 7:13Speaker 01

  had a lot of folks who were pretty far left curve and pretty far right curve in parallel. So you just sort of have these guys who are on one hand, funny JPEG of a bear, I'd like to interact with this. And on the other hand, we're like, okay, these guys have some kind of fun game theory or liquidity mechanisms here. Let's see what happens next. And at some point, the joke was just, let's call it bearas instead of bears. And that just sort of stuck. It was just someone in the Discord. And over time, I think that what we really saw was from talking to a lot of those folks who joined the ecosystem from the NFT point of view, was that there were a lot of ideas that they put forward and a lot of, I'd say, productive conversation, given that commingling of intellectual, you know, disparities, I should say. And it was more like, hey, what could we do that goes a little bit beyond a classic, you know, animal themed NFT project?

• 7:58Speaker 01

  And how can we do something a little bit more interesting here? And I think one sort of narrative at the time that was just gaining popularity and interest was just sort of, you know, on one hand, the broad concept of capital efficiency and maxing that out within crypto, but then also just liquid staking, I think, was really having a heyday. People were understanding Lido, Rocketpool, you know, DVTs, everything in between. And a question that kept on coming up, especially as new alt layer ones went live, like I think your avalanches and nears, et cetera, was, okay, there's, you know, hundreds of millions, if not billions of dollars securing this chain, but there's really not any liquidity present on the network itself. And then, you know, how you sort of solve that dichotomy? Because if you have the most secure network possible, that's, that's great. But if no one uses it and transacts upon it, then it's a bit useless, right?

• 8:42Speaker 01

  So the whole idea of Bear Chain, as much of a joke as it might sound on the top, was actually to build a chain that allows you to align liquidity and security at the protocol level, such that those incentives when a user is allocating capital sort of point in the same direction as opposed to, you know, somewhat different ones as they do right now. And we think that in many cases with proof of stake, there's stuff like Lido, there's stuff like Eigenlayer, et cetera, that very much feel like extensions of this in the right direction. But we wouldn't say they're as opinionatedly built into the protocol layer in the same way as they are on Bear Chain. So I think we hope to cover both the left and the right curve in that on one hand, it's like, hey, here's a chain powered by proof of liquidity, and that's really meant to build liquidity and security in parallel. And perhaps most importantly, use that to actually power the application layer so

• 9:27Speaker 01

  that there's a differentiated economic reason as well for applications to exist on that base layer. But on the other hand, there's a bunch of bears and it's kind of funny.

• 9:36Speaker 01

  You know, trying to go full range. So a little bit long-winded there, but I hope that that gives you a little bit of the context on why this, you know, has occurred as it has.

• 9:43David Hoffman?

  Now, that was amazing context. I actually just answered a lot of questions that I had about Bear Chain. The typical path, the typical like community creation story is that there's like some, a few founders, maybe one very technical founder who comes up with some zero to one innovation, and then they like make a chain around that, or they make a project around that, that technical breakthrough. And then that technical breakthrough gets broadcasted to the broader crypto community, and then many people in the broader crypto community become like pilled, they become nerd sniped about that one technical breakthrough, and then they decide to form a community around that project. That's like the normal path. It's like first there's technical breakthrough, then that technical breakthrough turns into a shelling point that many members of the community find interesting and want to become

• 10:28David Hoffman?

  A part of that community want to become more involved, want to become like, you know, inside of that inner circle that's about that one technical breakthrough. This seems to have like flipped things where first you had the community brought around these NFTs and a variety of different factors and the community had its own flavor and insights. And there seemed to be a lot of intellectual capital that was created and then a bunch of social capital as that community grew kind of more tight knit. And then they collectively with you and the co-founders created more of a technical breakthrough with proof of liquidity, which we'll talk about. But it was a community that came first rather than the technical breakthrough that came first. Do you agree with this illustration?

• 11:05Speaker 01

  A hundred percent. I think that's actually sort of the model that we've taken internally as well. And that it's exactly as you said, right? There's a large, there's a large, you know, institution or research group, whatever that might be, that spins out, you know, an interesting new concept, snowman consensus, you know, SWE, whatever it could be. And then it's like, okay, cool. How do we make people care about this? We get a whole bunch of money behind it. We start, you know, talking to KOLs, we start building quote unquote, community around it. We nerds type some people and we run at full speed. I think that we took a largely opposite direction. And of course, I would love to be able to say, and I can say that a lot of the technical innovation that underpins Bear Chain was built internally. We've been really thankful to have input from the community along the way and just a large ecosystem of application builders.

• 11:47Speaker 01

  It's sort of been there while we build so that we can get their input live, which I think has also been incredibly helpful for us. But yeah, I think the model was kind of flipped on its head a little bit and we'll get to see how that ages. To date, I think it's been really good to us. But the, you know, the open market and a liquid token always has a different story to tell. And, you know, I don't believe in calling shots until, until I'm sure of it.

• 12:09David Hoffman?

  So there's going to be a bunch of technical questions that I have for you and I'm going to ask you about just like, you know, proof of liquidity and the EVM and, you know, a technical roadmap. But since this is a community like bootstrapped project or like a community first project, memetic first project, is there such thing as like a memetic roadmap? Because the memetics of Bear Chain has gotten us to this point today where we have like the layer one. It's, it's launched, the token's out and networks up and running and the community is there. But like, what's next for like the memetic side of things? What's next for the Barra side of things instead of the chain side of things?

• 12:42Speaker 01

  No, good question. I think the Bear Chain has developed its own culture. Some people really don't like it, other people's do. And I'm, you know, I have no, I have no dislike for, for those who, who hate it, if you will. I think everyone, everyone's intelligent opinion. And I think that on my side, We can't exactly, I think that planning a memetic roadmap is sort of a recipe for disaster. Because trying to force a meme or trying to force a narrative or trying to force some like, you know, sphere of existence from a cultural point of view often ends with getting your face punched. But I do think that finding ways to run with existing new things and then to have fun with it is kind of what it comes back to. And I think that a lot of what we thought about as building Berachain is, okay, how do we build something that is both robust and excellent and fun at the same time?

• 13:28Speaker 01

  Which is of course easier said than done, but the end game, what people are looking for, right? I think a lot of people want to be on-chain to, of course, make money, but also to have a good time while they're doing so. So for us, it's not like, ah, man, we got to make sure that people laugh about this next month.

• 13:43Speaker 01

  You know, this is the joke of the week. I think it's actually just sort of on one hand leaning into FUD and being like, cool, man, if like Suzu and Arthur are gonna like dump my coins, I'm sure that that has always worked well for their other ones in the past, right? Or like, you know, it's gonna be like, yeah, we're not launching in Q4, we're launching in Q5. I mean, like, that kind of stuff is, I'm quite okay and I'm an advocate for, you know, I'd say friendly fire humor. Because I think that, you know, if you look at like, I think a lot about the concept of eight-miling oneself. You know, if one's just to think about like the callback to the old Eminem movie. It's like, if you say all the shit that's going wrong or that people can like, that people can call you on in public, then I think that it becomes a lot less fun to FUD.

• 14:25Speaker 01

  And otherwise, times you can actually kind of weaponize that FUD into something a little bit more entertaining. So, sorry about my other alarm going off. But yeah, till there are no exact memetic roadmap, but keep on doing what we're doing in terms of leaning into fun shit. And I think not taking things exceptionally seriously when it comes to the way that people might view us.

• 14:43David Hoffman?

  All right, let's dive headfirst into proof of liquidity. And from what I gather, from what you're saying to me just now, this is kind of like the, call it North Star of Berachain. It's like the thing that you guys are really bringing to the table and the innovation that you guys are really trying to squeeze the juice out of. Just give us a download on proof of liquidity.

• 15:00Speaker 01

  100%. So, you know, proof of liquidity basically means that as a block is built on Berachain, there's two factors that go into it. One is the Bera token itself, which is the gas token and the staking token of the network.

• 15:11David Hoffman?

  There's a Berachain is the ethos of Berachain.

• 15:14Speaker 01

  100%. And then there's also a token that is non-transferable and soulbound called BGT, which perhaps, you know, on the nose stands for the Bera Governance Token. And BGT is really what, in my mind, the network circles around, if you will, in that it cannot be earned by, you know, just, you can't stake BGT to get more BGT, if you will. You effectively have to do the work of providing liquidity on the network. And the way that this works is that, you know, going back to my initial point, when a block is built, there's two factors that affect, I say, that block building process and the size of the reward. On one hand, the amount of Barra that a validator has staked with it is effectively increasing or affecting the frequency of its block production. So it's linear weighted block production on one hand.

• 16:00Speaker 01

  On the other hand, the amount of BGT that a validator has delegated towards it is actually what affects the size of its block reward. And each block reward, or each block, is effectively built with a reward based on a formula that sort of has a constant, that's based on, you know, effectively just, there's a Y equals MX plus B, there's a B type value. And then there's a more complex equation that I could probably touch on in more depth, like Quants might kill me, that is basically meant to avoid the centralization of BGT, but nonetheless allow validators to have more BGT directed towards them to produce larger blocks.

• 16:34David Hoffman?

  So Can I just check my understanding really quick? So we have just normal proof of stake on the one layer, which is, you know, for the Ethereum minded people, you know, ETH stake to a validator. And the more ETH that you have staked, the more frequently you are going to validate a block. And so that's the Barra token. The more Barra that is staked, the more frequently you are going to add a block to the network. Like, nothing changes there. But the new thing is that the governance token, the BGT governance token, determines the amount of rewards that a validator gets for proposing a block. So if you propose it, maybe you're proposing a block very, very frequently because you have a lot of Barra staked, but you could have not very much rewards

• 17:16David Hoffman?

  if you do not have a lot of governance tokens pointing towards your validator. Is that correct?

• 17:21Speaker 01

  Yep, you've totally got it, man. And I'd say that from there, the part that is most interesting and most important, in my opinion, is that those emissions, those BGT block rewards, are not primarily being actually reaped by the validator per se. Those are actually primarily being emitted into the ecosystem. As in, there's a set of pools, you can think of them as reward vaults or a cutting board of sorts, like one might have been familiar with in like curve type ecosystems. That validators can choose to direct those emissions towards. And these are often either pools or vaults or any form of stakeable token from applications on the network. What gets kind of interesting there, in my opinion, is that you actually have the opportunity for the first time

• 18:01Speaker 01

  for applications and validators to work together to bootstrap liquidity and effectively build a marketplace for the emissions of the chain. So that means is that, you know, whether that is the native DEX that is built into the chain or, you know, a random money market that might come up, or even a gaming project, a structured project, a product, whatever it might be. They can actually work through effectively an incentive marketplace that's also built into the chain with this validator and say, "Hey, in exchange for you giving me X dollars worth of BGT or, you know, 100 BGT emissions, I will give you 125 of my token," or whatever that might, right? And they can actually look to find that, that market optimal rate, if you will, that allows them to price their liquidity

• 18:43Speaker 01

  and do so in a manner that is, I'd say, you know, meaningfully more cost-effective and efficient than sort of, you know, a standard liquidity mining program. And in this way, validators and their delegates and the BGT delegates are effectively able to earn a diverse portfolio of these different ecosystem projects or these different, you know, products on the chain and their governance tokens. And the applications themselves are actually able to, on one manner, effectively subsidize or boost their own incentive profiles through the chain itself. And I think what this sort of goes back to for us is that when we look at the majority of networks today, there's very little that's done, I'd say, at the protocol level to actually support the application layer, right?

• 19:24Speaker 01

  And one can certainly look at, you know, sort of CSR-type gas rebate programs or, you know, STIP-type programs or, you know, like Avalanche, Rush, Grant-type programs, whatever that might be. But we don't really see these as things that are necessarily always sustainable or enshrined into the chain. They're rather things that are bursts of nitro, if you will, right? While on this side, the whole point of Bear Chain's application layer is to drive value back to the chain and the whole point of the chain is to drive value back to the application layer. So what you're really looking for here in a perfect world is for people to be providing liquidity onto pools that they'd like to use on the network, then taking that BGT that they have earned for providing that liquidity to a set, you know, there's only a certain set of whitelisted pools that rose over time by governance.

• 20:09Speaker 01

  And then to take that BGT and say, hey, I'm going to delegate this to a validator that is in turn effectively incentivizing pools that I care about. And that allows me to auto-compad my rewards to some extent. Or perhaps I'll delegate it to a completely different one that is working with a set of other projects in the ecosystem whose incentives I'd like to get exposure to as the validator takes a cut of that. So in short, the way we see it is another degree or another degree of freedom for interplay between the application layer and the validators on the network. That effectively means that their liquidity helps to boost the security over time.

• 20:42David Hoffman?

  Okay, so there's, is it correct that there is a three, like a triangle-based loop here? Where one is the application layer, one is the BGT governance token stakers, and then the third is the validators who are staking Bera, the gas token. Is that, is that correct?

• 20:59Speaker 01

  Yeah, that's correct. The only thing I would, you know, sort of add there is that when you think about the BGT token holders, they're also, they're not quite staking it. I'm just kind of nitpicking on the terms. But they're delegating it to a validator. And each validator will basically have both a Bera stake and a BGT delegation.

• 21:16David Hoffman?

  Okay, okay, so, so I really like this. I want to try and nail down this triangle. So validators have Bera staked.

• 21:22Speaker 01

  Yep.

• 21:23David Hoffman?

  And then they have an amount of BGT delegated to them by BGT stakers.

• 21:30Speaker 01

  Just basically farmers, anyone who has acquired BGT on the network largely by providing liquidity. But yeah, you're, you're good so far.

• 21:37David Hoffman?

  Okay, cool. And then validators have a relationship with applications in the app layer. Can you define that relationship? How is, what is the connection between Bera validators and apps in the application layer?

• 21:51Speaker 01

  Yeah, I would primarily think of it as an order book. In that every validator has, you know, emissions that are these BGT emissions that are a function of, like I mentioned, the amount of Bera that they have affecting the number of blocks they're producing. And their BGT delegation affecting the size of those block awards. And each application is able to effectively propose a bid in that marketplace, right? Either directly to a given validator or to the set as a whole, if you will. And say, hey, we're looking for 100 BGT for this pool of ours. Like as in, we want to incentivize it with this. We're willing to give you guys. You know, X amount of our token in exchange. The validator can then take a cut of that commission of, you know, those tokens distributed to their delegates. And then, you know, pocket their remainder.

• 22:36Speaker 01

  So we really think that there's a pretty interesting system there where DApps can effectively price their own liquidity in the form of the emissions of the network. So the ownership is almost like, yeah, I think that that hopefully comes across clear.

• 22:51David Hoffman?

  I think the thing that I'm hung up on is the BGT emissions rather than Barra emissions. I'm used to, you know, like Barra is the token that's being staked and validating the network and in the Ethereum world.

• 23:02Speaker 01

  For sure.

• 23:02David Hoffman?

  That doing that activity earns you new ETH.

• 23:05Speaker 01

  Yep.

• 23:05David Hoffman?

  But you are talking about BGT emissions.

• 23:08Speaker 01

  Totally. And I should add one more thing that, sorry, I didn't mention before that I hope makes the system come a little bit more, more full. Which is that at any point, you can take one Barra and burn it one way into one BGT. And that's how the loop closes a little bit. And the whole point and the whole reason that BGT is sort of non-transferable and that the second token exists beyond a regulatory point of view is that we wanted to enforce, I'd say, not just a social, but also a technical contract. Where in order to actually reap the reward to the benefits of the network in terms of its inflation, that typically goes towards network security alone, if you will. In this case, we wanted to actually enforce the fact that people need to provide a useful service, right?

• 23:51Speaker 01

  Or a useful, I'd say, activity to the ecosystem, which very much starts in its most basic form, if you will, by liquidity provision. But over time can really evolve into any form of stakeable token incentivization. So just to give you a little bit more of an abstract interpretation of this, right? One could say, okay, there's a game on the chain. And if you play this game, you know, X days a week or spend X amount of fees in the game, you earn this token. And then there's a way to actually say, okay, I'm going to find a way to propose, you know, a governance proposal that says, I can stake this token and earn BGT for doing so and earn some portion of the fees from that game, if you will. Right? So I would, and sorry, the fees are denominated in Barra.

• 24:30Speaker 01

  It depends on what sort of fees one you're referring to here. Can you, could you clarify the fees?

• 24:37David Hoffman?

  Yeah, so like the when I want to make a transaction on Barra Chain.

• 24:40Speaker 01

  Oh, yes.

• 24:40David Hoffman?

  And like I pay gas, that is in Barra, correct?

• 24:43Speaker 01

  Yep, you got it.

• 24:44David Hoffman?

  Right. And so if I'm collecting fees from the chain, my understanding is that that would be Barra.

• 24:49Speaker 01

  Oh, yes. And like, like, you know, validators are able to, you know, their standard MEV tips, et cetera, et cetera, that all happens in Barra, right? But I guess what I'm getting at is that folks who are delegating BGT, which they have often earned via providing liquidity or doing some other sort of governance, whitelisted approved, you know, activity on the network, are then effectively able to just earn a whole bunch of other different incentives from the other applications that are working with validators on the chain. The whole goal here is that the application layer is something that should actually not be value extractive, but value added to the network.

• 25:21David Hoffman?

  The general like loose vibe that I'm getting is that we are finding a, by tying together the validation of the chain and liquidity to the application layer, we're just bringing these things closer together. We're really dissolving the layer, the separation, the line between the application layer and the actual like layer one infra blockchain itself.

• 25:40Speaker 01

  Yep.

• 25:41David Hoffman?

  But and to be clear, what does the Barra token have inflation as well?

• 25:47Speaker 01

  Well, the Barra token's inflation really is in the form of BGT. So all the emissions in the network are in the form of BGT.

• 25:53David Hoffman?

  But you can't go from BGT to Barra. You can only burn Barra and create BGT.

• 25:58Speaker 01

  Other way around. So that's.

• 25:59David Hoffman?

  Oh, okay.

• 26:00Speaker 01

  There you go.

• 26:00David Hoffman?

  Okay, that's the, okay, I see, I see, I see.

• 26:03Speaker 01

  So that's how you functionally get the inflation.

• 26:05David Hoffman?

  Oh, so you can destroy your governance token and have no governance, but you can get money.

• 26:11Speaker 01

  Yep.

• 26:12David Hoffman?

  In the form of Barra. So you give up, you give up governance for money, but you cannot, you cannot buy governance, okay? Because because BGT is non-transferable.

• 26:21Speaker 01

  You've got it. And that's, that's, I think it looks like it's kind of, and you know, one of the things that we need to work on most, and it's tough because there's a lot of different levers here, but we also just need to do a better job of bite sizing this over time. And it's 100% one of our core focuses at the moment, because I think just education's paramount at times like this. But yeah, you've got it, right? Like, we want it to be that if you want to have governance power, the ability to sway incentives on the network and the ability to receive lots of incentives on the network, hopefully as these ecosystem dApps take flight, then, you know, you have to have that skin in the game, if you will. But you always have the optionality to say, okay, I'm just going to play Liquid and I don't pick my Barra and I'm going to, you know, you know, see the market go up and down, maybe LP it, do whatever I might want.

• 27:03Speaker 01

  So that's sort of the contract I was looking to enforce there. And I think that when we think about that from just like a cost of security or a cost of liquidity point of view, the real thesis is like, you know, there's many chain. If you look at a sweet type network, right, you might be saying, okay, there's 10% yearly inflation on like, what, $40 billion or something like that. And it's like, okay, $4 billion is being used to secure the chain. But there's what 1.5, $2 billion, something like that. And security actually or in liquidity actually living on the network. So does it always make sense? And I'm using a facetious example, but does it always make sense to pay a two to one ratio for your security to liquidity? Our thought here is that that can be a lot better over time.

• 27:43David Hoffman?

  Interesting, interesting. Yes, there's, there's going to be some harmony, some equilibrium found between the size of governance versus the size of the actual money.

• 27:52Speaker 01

  You've got it. And I think that over time, the degree of flow from different incentives on the network will probably also, you know, play into that as well, because people might be able to say, okay, I'm earning dollars X from the various incentives that are flowing to BGT. Maybe it makes sense for me to just maintain my equilibrium here. Whereas if the price of Barra crashes or spikes, wherever it might be, that can, you know, surely affect that equilibrium. Right? So I, I think it will be a very economically responsive system, which is also being tied into the security of the network with a strong base plate, I'd say.

• 28:23David Hoffman?

  Right? Yes. Yeah. The whole idea here is by like, I mean, putting things into the same layer from a Bitcoiner standpoint, like putting the security of the chain and the application of the chain into the same spot is like a huge red flag that Bitcoiners will hate this.

• 28:37Speaker 01

  Of course.

• 28:37David Hoffman?

  But then the more technologic, the, the technologist side of things is like, well, you know, if we can balance things right, we can, you know, we can mitigate those weaknesses and really lean into those strengths that that provides. And hopefully this act turns into a flywheel that allows an ecosystem to grow.

• 28:53Speaker 01

  A hundred percent. And like, it's, it's interesting. We've seen both sides in that on one hand, you know, just speaking from that, like, you know, quick offhand Bitcoiner perspective, they're like, actually, you know, we've been looking for so many different ways to actually make Bitcoin assets more productive on chain. And there's the advent of Babylon, et cetera. There's something interesting to be said about, okay, here's the first way that you could actually have super deep liquidity. For you know Bitcoin pairs and you know think about Lombard BZ pump, Sol, whatever it might be. In a manner that allows these Bitcoin players to to get a little bit deeper. But of course, you know, folks who are playing with Bitcoin LSTs, etc. Are probably not your your purists, if you will, right? They might be more locked down in cold stores. These guys might be a little more gunslingy. And that's totally fine. But I remember a funny conversation I had like a couple of years ago with with Cozy from Premia.

• 29:38Speaker 01

  Was he was like, yeah, you guys actually have this. This feels a little bit like proof of work. And I was incredibly, you know, I guess confused by this concept.

• 29:45David Hoffman?

  Yeah.

• 29:46Speaker 01

  I I think what he was getting at was that, you know, the fact is, if you can't buy the important token. And you have to quote unquote, do the work in this case of providing liquidity to to quote unquote mine it. Then there's a little bit of a very, you know, squint and see the the similarity type of thing there. I think we've seen good reception so far, but I I broadly err towards the point that you first raised, which is to say. I think this is is for the folks who are perhaps, you know, more recent technologists and see themselves thinking, okay, you know, crypto ultimately does come down to the application layer. In in our opinions. And really what can be can be grown over there. And the chain really is nothing more than the sum of its applications in the vast majority of cases. So we might as well build a system that causes hundreds of millions of dollars to flow into the network in terms of incentives.

• 30:31Speaker 01

  In supporting those applications as opposed to something that causes it to flow away, if you will.

• 30:37David Hoffman?

  Right, yeah, I totally understand. There's been a trope by proof of stakers out there. It's like if you squint at proof of stake hard enough. Oh, excuse me, if you squint at proof of work hard enough, it's actually just proof of stake with extra steps. Whereas the the stake is like your your ASIC miners, like you are staking your ASIC miners on future Bitcoins, future yields.

• 30:54Speaker 01

  Exactly.

• 30:55David Hoffman?

  And it's just like all the hardware and all the supply chains is just like kind of just a a convoluted means to an end to get to proof of stake. And I think what you're doing is you're finding some like interesting middle ground.

• 31:05Speaker 01

  Yep.

• 31:06David Hoffman?

  That also ties into the app layer.

• 31:07Speaker 01

  Yeah, you've got it. So at the end of the day, we're just like, hey, on one hand, this is a EVM identical L1 that is is built to really power the application layer. But at the end of the day, it's meant to be an accelerant, right? The best apps will succeed with or without bearer chain. I I say that from not a facetious point of view, but simply the fact I believe that the best apps always win. But I believe that this can very much be a force multiplier and something that helps a lot of them. Cross that like chasm of death, if you will, between like, hey, we're, you know, trying to get off the ground around like a 10 mil market cap. And we got to find ways to keep our emissions going and keep people flowing in. And hey, we found PMF and we're ripping up into the sky.

• 31:43David Hoffman?

  Introducing UniChain. Built for DeFi, empowered by Uniswap, UniChain is the fast decentralized Layer 2, designed to tackle blockchain speed and cost challenges. With this mainnet now live, you can enjoy transactions at up to 95% cheaper than the ETH Layer 1, all while benefiting from an impressive 1-second block time that will be getting even faster very soon. UniChain is the first Layer 2 to launch as a Stage 1 rollup on day 1. That means it comes with a fully functional, permissionless proof system from the start, increasing transparency and further decentralizing the chain. More than 80 apps are joining the UniChain community, including Coinbase, Circle, Lido, Morpho, and Uniswap. You'll be able to bridge, swap, borrow, lend, and launch new assets and more from day 1. Built by Uniswap Labs, the team behind the protocol that's processed over 2.75 trillion in all-time volume with zero hacks,

• 32:28David Hoffman?

  UniChain truly enhances DeFi experiences with faster, cheaper, and seamless transactions even across chains. And soon, the UniChain Validation Network will allow anyone to run a node and earn by securing the network. Visit uniswap.org and swap on UniChain today. With over $1.5 billion in TVL, the METH protocol is home to METH, the 4th-largest ETH liquid staking token, offering one of the highest APRs among the top 10 LSTs. And now, CMEth takes things even further. This restaked version captures multiple yields across Karak, Eigenlayer, Symbiotic, and many more, making CMEth the most efficient and most composable LRT solution on the market. Metamorphosis, Season 1 dropped $7.7 million in Cook rewards to METH holders. Season 2 is currently ongoing, allowing users to earn staking, restaking,

• 33:13David Hoffman?

  and ABS yields, plus rewards in Cook, METH protocol's governance token, and more. Don't miss out on the opportunity to stake, restake, and shape the future of METH protocol with Cook. Participate today at meth.mantle.xyz. One last hole in my knowledge that I think I have about this whole economic loop between the apps, the governance, and the chain is the liquidity provisioning. How does, can you connect? That is the... At what point in the cycle does the liquidity provisioning happen?

• 33:43Speaker 01

  Yeah, great question. So the way that it starts is that when the chain goes live, each validator has, sort of like I mentioned, this cutting board of this pie chart of allocations, where they say, okay, every time I produce a block, this is where the rewards go.

• 33:57David Hoffman?

  The BGT rewards? And they select applications to issue their BGT to?

• 34:03Speaker 01

  You've got it. And the way that that starts is that, you know, extremely conservative, there's a native DEX that is built into the chain to bootstrap this function precisely, such that folks don't have to worry like, okay, am I sending my governance rewards to a rug contractor? Like to the 40th UniFork, etc., right? Instead, over here, it's like, okay, we're going to start with a very basic, you know, a very basic battle-tested infrastructure piece. And then, over time, via governance, really, any application on the network can join that set. So you could have someone who has a money market, and then they say, okay, here's a supply-side pool for ETH, or whatever it might be, and we want this to be eligible for what we call a reward vault. And then the reward vault is added to that cutting board that validators can choose to direct emissions towards.

• 34:47Speaker 01

  So you just think of it as another section, the pie chart, and then each validator can say, okay, cool, like, I want to direct emissions towards this. I don't want to direct emissions towards this. Sometimes, that can be a validator saying, okay, this app has been willing to offer me incentives in the form of their token, and therefore, I will choose to direct emissions towards this one. Other times, they might say, hey, we have a large staker, or a large LP, or a large delegate that is using this pool a ton, and they want us, or we think it's a good idea to increase their yields, such that they stake more Bera, or they delegate more BGT with us. So there's a few different ways one can play in that sense.

• 35:21David Hoffman?

  Okay, so this is trying to harmonize three different players. We have the app player, the validator player, the governance player. How do you know that, when this is all said and done, and everything equilibriates, that we actually discover a sustainable Nash equilibrium, rather than we, like, fall off onto like one convex or concave side of things, and like, we end up in some equilibrium that's like, is stuck, and maybe there's a cartel of people who are voting, and all, it just gets stuck? And this, and the mechanism kind of just like erodes, because wherever the value is pointing, is pointing into some like, you know, dead end for the chain, and things are not in the equilibrium, and it's actually not doing the mechanism. How do you know?

• 36:03David Hoffman?

  That the the ultimate endgame of this game theory is actually a sustainable place.

• 36:08Speaker 01

  Totally. And look, I think it's a very prudent question and one where if I told you I know for sure that it's going to be functional, I think we'd be in a very different place. And I wouldn't be as presumptuous to say that. But what I think I can say is that from all the economic modeling we've done so far, we see a couple of different cases that can be scary for the system. For example, if all those emissions just concentrate on LST pairs, then it's like, okay, cool. We're back to proof of stake, right? Right, right. And that's one of the things.

• 36:33David Hoffman?

  With extra steps, actually with extra steps.

• 36:35Speaker 01

  Exactly. It's proof of stake, you gotta like jump through three, like, you know, hurdles first. And that just seems stupid. So I think a lot of it is, on one hand, social layer conditioning, which only goes so far. But to be able to say, hey, look, these are the types of applications that seem very interesting here. Here's novel differentiated use cases that actually lean into this around the velocity of capital primarily, using that to bootstrap different derivatives and finding ways to actually, I think, focus on applications that have enough fee generation, incentives being thrown off and product market fit, if you will, to make something like this sustainable. And then on beyond that, there's also sort of a governance, like guardian council, if you will, that includes folks from a number of different firms that have worked on proof of liquidity alongside us in terms of auditing, economic audits, et cetera, that are meant to basically help ratify or I would I would say serve as more than anything else,

• 37:20Speaker 01

  an emergency brake for things that can be very wrong there. And this is a council that's made primarily of external third parties, to be very clear. You but think like folks like asymmetric or small quants, et cetera, that have been pretty deep in the weeds on these sorts of things. I think the goal is to be as far as possible from censoring the system, but moreover, to provide a degree of guidance and to basically say, hey, if someone is going to provide or try to push all the emissions on a network to like a, you know, a mochi, a curve attack type of thing, or, you know, a Batman pair that's just, you know, meant to to extract value, then there should be a manner of intervening on that. I think beyond that, though, if I'm to be very blunt with you, David, I think it's an economic experiment. And the best way of playing out an economic experiment is.

• 38:02David Hoffman?

  Is doing it.

• 38:02Speaker 01

  Yeah, doing it, like setting the guardrails and saying, hey, like, here's what we hope happens. And here's how we've like talked to a whole bunch of teams about what we think could make a lot of sense. But decentralized network, it's it's a pretty free flowing, you know, ecosystem. And the best thing that we can do is is set it up for success and then do our best to to guardrail it in the right direction. But we we can't, I don't think we can promise guarantees because that would just be foolish.

• 38:27David Hoffman?

  Right, alright. Okay, so Bear Train is launching into February of 2025, which is the most saturated that the crypto industry has ever been, which just makes sense because we just get more saturated as time goes on. But nonetheless, it's a difficult time to start a Layer 1, just with how much dispersion there is, how much, how many other Layer 1s and Layer 2s there are. So what is your plan to penetrate into this market? How do you grow market share?

• 38:52Speaker 01

  For sure. I think it's gotta be multifactorial, right? I think that, you know, the, the days of, okay, I'm gonna build a bunch of, you know, DeFi products or OpenZ type products that we've seen 100 times before and then hope that all works, are kind of behind us. And I think that our focus on the application layer is what we hope will very much set us apart. And what I think has put us in a decent place from, from sort of our testnet slash earlier growth phases. You know, projects within the Bear Train ecosystem have on one hand been able to raise a bunch of VC, which is always a nice to have just from a social signaling point of view. But more importantly, I think have been able to create user experiences and I'd say usable systems that people love, even at the earliest stages of the network.

• 39:30Speaker 01

  And there's sort of a big range, whether that is like your, your next, it's a next level like re-hypothecating LP type DeFi protocol. So think about something up the range of like Hyperplex, or something that allows you to add a whole new dimension of a sort of like incentive layers to perps like Exponents. Or, you know, sort of new takes on LSTs like Smiley, et cetera. Or, you know, things that are very much up to gaming consumer social type angles like Honey Chat or Puff Paw, which, you know, was, was notoriously viral at one point, like a vape to earn deep in. There are some pretty interesting like long-term, you know, health data implications. So we think it's kind of cool. Or even a squawth of Layer 2s that are actually looking to build on Bear Train as well, which is another, you know, entirely

• 40:12Speaker 01

  wacky part of the, the system that I think very people have, very few people have crocked as of yet. Which can be much more, I'd say, app-specific or vertical-specific, you know, manifestations of the network. That can be focused on RWA's, consumer, really anything in between. The reason that those get pretty interesting, and then I wouldn't want to tangent too hard on this, is that on one hand, they provide their own clean execution environment, mempool, optionality, et cetera. But you might have heard me mention earlier that Berachain is EVM identical. And what I mean by that is that it's not just compatible in the same way that a Phantom or an AVAX, et cetera, might be. But it's actually identical in that when it comes to different EIPs, opcodes, et cetera, you're running the exact same unmodified ETH execution clients.

• 40:55Speaker 01

  That means that if one wants to go and build an OP stack rollup or an Arbitrum orbit rollup, et cetera, it's just about as easy, which makes that quite cool as well. Because you can even have a system where L1s and L2s, and we're deciding whether we want to call them L2s, but let's use that word for now, are even more closely intertwined or even more aligned than there have been on ETH. I know there's lots of debate back and forth about L1, L2 parasit city. I'm not even going to attempt to re-pronounce the word, but you know what I mean, that that relationship.

• 41:26Speaker 01

  And I think that that's a contentious one, because I think it all depends on the view of the world that you have and how long-termist you might be. But one thing that is kind of interesting on Berachain is that proof of liquidity can actually form a pretty cool relationship there. And that, for example, you could have a LP that is the native token of Berachain, aka Bera, paired against that L2's governance token, and actually have that pair living on the Berachain network as part of proof of liquidity, generating different block rewards or PGT rewards. You could have those rewards being pointed at the bridge contract, for example, for that L2 itself, providing a form of native yield. While at the same time, the liquidity pair living on the L1 is contributing to both the L1's liquidity and the block rewards being produced on the network.

• 42:11Speaker 01

  So I'm giving very high-level examples, but we think that there's some pretty cool unlocks that come down the road here as well. And we think that the ecosystem itself is perhaps the most robust that exists within an L1 ecosystem at launch. I could give you the vanity metrics, but I think that's kind of nonsensical. What I can say is that there's probably between 60 and 75 different novel applications that have interesting twists that we haven't seen on other chains before. And I think are all going to get their chance in the limelight. But we've advised many of them to be thoughtful about timing and making sure they give themselves the best shots on net. Because as you can also imagine, in markets like this... I think there's like two responses, right? It's either, okay, let's like get out the door as soon as possible and try to grab as much liquidity as we can.

• 42:55Speaker 01

  And then, you know, be the, you know, the one that makes it out of the nest. Or there's a response to say, okay, let's stay a little more heads down. Look for a period where we can be oxygen to a flame as opposed to, you know, to squashed out by a redder market. And then capture that opportunity. So I've gone on for a while, but the TLDR is that I think there's a number of different directions for applications building on Bear Chain. And they're already much better set up for success. Both from previous work done over the last year or so on Testnet. And proof of liquidity than I think you'll find in many other cases. And I think that despite the red market, one of the things that I worried about most was our application builders, you know, just saying like, oh no, like fuck this, like time to hop over to the next shiny new thing.

• 43:40Speaker 01

  We haven't seen that as of yet. I hope that we continue to not see that. And, you know, ourselves as a team are very much in the trenches, in the discords, in the Telegram chats. Working alongside them to make sure that they have all the resources they need to do well.

• 43:54David Hoffman?

  I think many people will place Bear Chain next to Monad, just simply due to the proximity of when these things are gaining attention. And due to the fact that both of these things are EVM identical. Monad will love to, I'm sure, talk about its parallelism and its parallel database and how fast it's going to, if how fast it's going to go, to my knowledge, Bear Chain is also very fast. Maybe you can just talk about like the, the technicals behind the scale of the layer one. And just any thoughts and directions about L1 scaling as it relates to the project?

• 44:25Speaker 01

  A hundred percent. Yeah. Look, on our side, I think that what's, what's pretty cool is that Bear Chain has been built on a framework called BeaconKit that we've developed in-house. And that effectively means that you can have a meaningful degree of plug and play between the consensus layer and the execution layer. Right now, it has been very much optimized for. Tendermint consensus, which is a gift and a curse. It's a gift in that we have, you know, single slot finality, which is wonderful. And some that we believe have a lot of upsides over time. It's a curse in that, you know, you do hit sort of fundamental scaling limits from a BFT point of view. It's a validator set, right? So right now there's a set of, you know, about 69 validators that we expect to expand to a cap of 200 and change over time. At which point you'll need more fundamental upgrades of network or, you know, I'd say more robust thoughts around consensus upgrades of the mechanism over time.

• 45:09Speaker 01

  That could actually cause that set to scale even further and decentralize even more. When I think about L1 scaling as a whole, I think that I think about it a lot as a function of, you know, user experience. I think about it to some extent as just, you know, what does gas per second feel like? And what does finality feel like? Because I think at the end of the day, people are chasing a feeling, if you will, as silly as that might sound. But they want to say, hey, I clicked this button and the thing happened. And a lot of that can be simply a function of user experience and abstraction on the first, on the front end. And making sure that your apps are excellently built from either an AA point of view and EIP 7702 type stuff. Or it can be a matter of just making sure that your chain itself is really fast.

• 45:49Speaker 01

  Being really fast has not been our North Star or our focus, I'd say, but we have sort of like sub two second block times. And with, you know, near instant finality, it just means that when you click that button, it does feel pretty good. And we hope to maintain that over time. But I think that when we think about L1 scaling as a whole, I think it really just will come down to those things. It'll be, okay, how decentralized can you ensure that your network is? And I'd say that Tendermint has certainly options for doing that over time. It's, I should say Comet more than Tendermint. Easier said than done, but nonetheless, something where there's a lot of room to push the boundaries. And especially with the new leadership of the ICF, I believe that they'll be thinking a lot more about the practicality of this over time. On the other hand, our framework is actually optimized for the ability to sort of, you know, upgrade or swap out consensus engines over time.

• 46:35Speaker 01

  And we've also, you know, looked at other forms of that. That could be quite interesting for us as the network scales or perhaps reaches, you know, certain limits. So I think it's go faster, be more decentralized. I optimize for user experience. I'm excited and, you know, hope to see good things from the Monet guys. They're, you know, friends and I hope friendly competitors and groups will end up doing good things with down the road. I had no idea about them being EVM identical. So I think that's super cool if they're able to, you know, enable the same stuff. I wasn't sure to what degree their, you know, their version of the EVM sort of differs from, from what we currently see on Eats, et cetera. So it should be very cool to see where all that plays out.

• 47:13David Hoffman?

  So last week, Smokey was Berachain launch day.

• 47:16Speaker 01

  Hmm.

• 47:17David Hoffman?

  Uh, and whenever a token gets minted, at least in the current milieu of crypto Twitter and crypto sentiment, whenever a token gets minted and it's a very high price, there seems to just be a ton of uh angst, vitriol, like toxicity, anger about the launch of tokens these days. And Berachain was no exception. There were like critiques, criticisms, accusations of like Berachain being a VC chain, that VCs were, were, they were locked up, but they were going to be able to sell their inflation. A bunch of things. I personally am giving less and less weight to these like critiques of just like somebody else printed a bunch of money and I wasn't a part of that. And so therefore I find it gross.

• 48:00David Hoffman?

  But nonetheless, I do want to kind of just like carve out a place in this podcast to elevate those opinions.

• 48:05Speaker 01

  Yeah.

• 48:06David Hoffman?

  Um, now granted, uh, a lot of this, the general vibe was that this is a VC chain and it's going to make a bunch of VCs a bunch of money. And it's not going to make, it's not going to make the retail or the consumer or like the everyone else a bunch of money. It's just all only for VCs. And I was listening to Vance Spencer on the Friday Bell Curve podcast, address some of these things head on in what I consider a pretty effective way. Uh, and I would encourage anyone who's interested in that, this part of the conversation to go listen to that. Now Vance Spencer Framework is one of your guys' VCs. And so they, they are on that side of the, the conversation. In my opinion, uh, after listening to Vance, I think that the burden of proof is on anyone who is

• 48:49David Hoffman?

  antagonizing or on the opposite side of that. But nonetheless, I just wanted to give you an opportunity to kind of just like address some of the FUD or criticisms of what you would, what you have heard over the last week of like Berachain being a VC chain. It's making insiders rich. It's not for the community or blah, blah, blah, blah.

• 49:03Speaker 01

  Yeah. There's a lot to unpack there and part of my work over the next little while is going to be unpacking that properly. And I think that there's so many different ways to look at it, but I'd rather, I'd rather own things than not, right? We raised a long time ago and we raised in a timeframe where it was quite typical for, you know, VCs and team members to be able to stake lock tokens. Do I think that that's a great practice? No, is that something that I would love to change entirely? It's not like it's something that I care about in the slightest. I think I have more than enough exposure to the project and I have not thought about selling tokens locked or otherwise. And I think that the majority of our VCs are in the same boat. And one kind of hilariously interesting part is that a lot of the crying outrage is, oh,

• 49:48Speaker 01

  price is going down between because VCs are dumping. But with our custodian and, you know, we've been in the process of manually video verifying over time and making sure that people actually get those tokens so they can stake it, increase cities under the network, make that a little bit cleaner. And through conversations with the number of our largest VCs, they've actually said, hey, we are totally fine if you want to lock our staking slash, you know, rewards and have them vest on the same schedule. Like, I don't, they don't care. We don't care either. And that's news that we will have to discuss, both from a legal, practical, technical point of view. And then, you know, going full circle beyond that, even beyond quote unquote, trying to play defense, I think I would simply just say that for us, Spirit Chain started as a community project.

• 50:33Speaker 01

  We 100% raised venture capital on the way to try to build something that I think is both technically difficult and quite meaningful and hopefully has a major impact on the space over the years to come. But it's always been at the heart of it, the community, whether that is the NFT projects that started it all and, you know, that small Discord server, or whether it be the ecosystem of 200 plus projects that, you know, we talk to, interact with, a hot topic item for Unlaunched Networks has been, okay, how do you actually like reward, like how do you actually figure that distribution should look like? And it's often a bit of a mess. You can reward testnet users that clicked and farmed and tried to sibble certain things and that's a mess. And, you know, they certainly have their role and that's not to downplay testnet users in the slightest.

• 51:15Speaker 01

  And their great ethics about QA and figuring out all the things that can go right or wrong on a network. Some of the best examples to date have been when there's already some form of a live project and one can say, okay, I'll just reward my real users, right? And I'll reward those who are generating fees or revenue for the network. In our case, we basically tried to run a pretty thorough program that we called the Request for Proposal. And that, you know, both applications, community groups, you know, like whether that be a Thailand builders community that's focused on bear chain or a leading application on the chain could effectively put forward a plan for how they would actually, you know, use the proceeds of an airdrop from the token generation event and direct that primarily into growth for the ecosystem and

• 51:56Speaker 01

  growth for their own user base on mainnet. And that's actually a little bit later today. And we had, you know, 127 teams, I believe, received that on the application side and 70 something people received on the community side. I guess at the end of the day, what I'm getting at is that the majority of folks that have quote unquote profited or done well from bear chain are community related folks at the end of the day. And I think at the end of the project that is reliant on applications and we're a project that has a tighter relationship between the application layer and the base layer than just about anyone else. So I think at the end of the day, we are focused on making sure the community eats and the community wins. And if VCs help enable that along the way, that's great. And we have a very strong relationship with our VCs.

• 52:39Speaker 01

  But I mean, I think the casting is not quite right, but I understand why it's cast that way. And I like, I don't, I don't, I think, dispute the objective points of, hey, they've raised a bunch of venture capital funding and hey, there's this like staking stuff that's annoying. And you know, this is all VC chain. Like I understand why that narrative can exist. I just think that if people choose to approach, they can probably say, okay, the majority of the airdrop has gone actually to community members, to the folks who helped build this from the ground up. The majority of resources on the chain are going into the ecosystem itself and going to fuel the community in terms of users and applications. And the majority of time and effort spent by

• 53:18Speaker 01

  the team and the network, if you will, is entirely directed towards all. So I think that we will continue to face the accusations for the time being. And I have no doubt that it'll continue, but I think we're going to do our best to stay, keep our heads above water and continue doing what we can to ensure that, you know, people realize that we're in it for the long haul and that this isn't just about making VCs rich. I mean, that'll be a side effect if we, if we do well, but this is about making sure that we built something that hopefully leaves a mark on crypto for a long, long timeframe.

• 53:51David Hoffman?

  Last question, Smokey, before I let you go. What does 2025 look like for Veritain? What's the roadmap? What's going to happen? What's in store?

• 54:00Speaker 01

  Yeah, so much to be done, man. On one hand, I think the ecosystem will see a whole bunch of launches of, you know, citing new applications and we want to be there cheering them along from the sidelines, helping to solve their problems and helping to get ahead of anything that could be going wrong. On the other hand, we want to make sure that there's a lot of things for us to ship on the technical roadmap. That's going to involve a few different things. On one hand, there'll be withdrawals going live later in the year, which will be quite important. We're looking at slashing in the future as well. And then we're actually looking at making sure that we can ensure that L2 stack is as clean as possible, such that all these folks are going to build hyper-optimized manifestations of their work on Veritain are able to do so with very little to no friction. And then it'll be a lot of growth on the team side, man. I think that we've got a pretty solid push in APAC regions at the moment,

• 54:44Speaker 01

  but I'd like to continue expanding that, especially as we look around at East Asia, as we look to Europe and as we look to more and more institutional partnerships that very few people know much about when it comes to Veritain side. But also one that I think leans quite well into some of our past lives, where I was sort of previously a founder, you know, worked in VC, worked on, I'd say, the capital allocation side and have a number of folks that want to build interesting extensions of Veritain by taking bets on what they've seen so far. So I think we'll continue to double down on that in the near future.

• 55:13David Hoffman?

  Smokey, this has been really great. There's a ton of information coming very, very quickly from a podcaster perspective. You speak very precisely and quickly, which is just great for content. So thank you for joining me today.

• 55:22Speaker 01

  Of course. Thanks so much for having me, David. Appreciate it.

• 55:25David Hoffman?

  Bankless Nation, you guys know the deal. Crypto is risky. L1 economic experiments also risky. You can lose what you put in, but nonetheless, we are headed west. This is the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.