Ethereum's Next Decade | Vitalik Buterin

Ethereum just turned 10, and Vitalik Buterin returns to reflect on the last decade—and where it’s headed next. In this conversation, Vitalik shares what surprised him most about Ethereum’s growth, the hard lessons from challenges like The DAO and NFTs, and what he’d do differently if starting again. We explore Ethereum’s evolving cultural identity, privacy as a core value, the tradeoffs between L1 and L2, and how Vitalik envisions Ethereum surviving an AI-dominated future. ------ 🎬 DEBRIEF | RYAN & DAVID UNPACKING THE EPISODE https://www.bankless.com/podcast/debrief-ethereums-next-decade-vitalik-buterin ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ------ TIMESTAMPS 0:00 Intro 0:52 Ethereum’s First 2 Years 2:25 Ethereum’s Top Contributions 4:18 Biggest Surprises 7:37 What Took Longer than Expected 9:05 Overcoming Challenges 11:03 Lesson for Younger Vitalik 15:53 Bitcoin vs Ethereum 18:49 Ethereum’s Cultural Evolution 32:11 Privacy on Ethereum 37:42 Nation State Resistant Privacy 43:03 Cypherpunk vs Mainstream 56:05 World Ledger 59:09 Ethereum in 2024 1:02:23 Changes in the Ethereum Foundation 1:10:10 Economic Alignment 1:16:38 Scaling the L1 1:31:21 Ethereum’s Barbell Strategy 1:39:28 Ethereum Nationalism 1:48:28 ETH Treasuries 1:55:19 The Next 10 Years for Ethereum 1:59:35 The Next 10 Years for Vitalik 2:01:25 The Next 10 Years for Bankless 2:02:52 Closing & Disclaimers ------ RESOURCES Vitalik Buterin https://x.com/VitalikButerin 2021 Endgame https://vitalik.eth.limo/general/2021/12/06/endgame.html Convex and Concave Dispositions https://vitalik.eth.limo/general/2020/11/08/concave.html ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:00David Hoffman?

  So what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years?

• 0:05Speaker 01

  A future of computing where a trustless vision of security that is based on cryptography and verification of code. The era of trust me for security starts looking as archaic as the era of I'm not cleaning our water looks to us today. We've already gotten there with HTTPS. I think we need to get there with it with everything else. And I think Ethereum can be a huge part of making that happen.

• 0:41David Hoffman?

  Ethereum just turned 10 years old and we have back on the podcast Vitalik Buterin. Vitalik, welcome back to Bankless.

• 0:47Speaker 01

  Thank you so much, David and Ryan. It's great to be back.

• 0:51David Hoffman?

  So first, happy birthday Ethereum. The Ethereum white paper was published all the way back in 2013 and then the Ethereum mainnet launched in July 2015. So 10 years later, Vitalik, how has Ethereum turned out compared to what you envisioned?

• 1:06Speaker 01

  I mean, definitely far bigger than I was expecting. I think that's the most important thing. Also, it's definitely taken longer than I expected. It's definitely turned out to be more than I expected. I think when I wrote the November white paper, my plan was still that this would be a side project that I would quickly get done over a couple of months and then go back to university. And of course, that ended up not happening. And then at some point, we thought that we'd have four stages. We get to proof of stake and then exactly at that time, the foundation ran out of money and then the project would just kind of sit on its own from there. That also didn't happen. Then, of course, all of the DeFi started happening and the various different waves

• 1:50Speaker 01

  of people launching different kinds of tokens started happening. And a lot of that was written in the white paper. You know, we had derivatives in the white paper as a use case and that actually exists. Though, of course, the words that people ended up using are often different in a couple of cases. ENS happened, stablecoins happened, but at the same time, lots and lots of really fascinating surprises.

• 2:18David Hoffman?

  Now that we have just 10 years of Ethereum in our rearview mirror, there's a lot that more or less went according to plan. I think if you read the white paper and then you look at what Ethereum is, you're like, yeah, that actually kind of followed suit with what some of the original visions were for Ethereum. Looking back, what has Ethereum uniquely contributed to the world that perhaps you are most proud of or most happy about?

• 2:42Speaker 01

  I think it has contributed to openness and decentralization and just being a norm and a default mindset for a lot of people in a way that I think needs to be refreshed every generation. Right? So, you know, what kind of traditional free and open source software was in the 1980s and in 1990s, I think, you know, the blockchain world is in a large part meant to be, yeah, basically that, but for the 2010s and 20s. And I think for a lot of people, it has actually done that. It's contributed to making a lot of things possible. Prediction markets are one of those examples.

• 3:26Speaker 01

  Back in the early 2010s, they were mostly an idea and I think Ethereum was the big experimental ground that really took them from idea to reality. The whole concept of DAOs, of course, lots of ups and downs in that space, but the just generally taking governance of organizations and structures that control resources and turning that into something that's like much more hackable. I think very, very proud of that. And I think we're going to keep on seeing dividends from that over the decades. So a lot of different things.

• 4:06Ryan Sean Adams?

  Vitaly, you mentioned some surprises along the way. I can imagine there have been a number of surprises, one of which, which is kind of fascinating trivia is you expected this to be a side project and it's turned into a, you know, a 10-year, more or less full-time engagement and pretty massive in terms of scale. What were some of the big surprises, though, along the way with Ethereum, things you didn't expect?

• 4:27Speaker 01

  The DAO getting such a huge amount of ETH and then, of course, breaking almost immediately.

• 4:33Speaker 01

  I think in retrospect, the first was like a bit more surprising than the second, but still.

• 4:39Ryan Sean Adams?

  Like that was like, I guess, a runaway use case. It was sort of an early DeFi use case in a way because it was all about capital formation. And you're like, suddenly, man, I don't recall, but like suddenly it was like 5% of all ETH supply or something incredibly massive.

• 4:55Speaker 01

  It got all the way up to 11%.

• 4:57Ryan Sean Adams?

  11% of ETH supply.

• 4:59Speaker 01

  I'm trying to remember, was it 11% of all ETH or was it 11 million ETH? Because if it was the latter, then it would be like 17%, but it was, yeah, it was crazy high.

• 5:07David Hoffman?

  It was the first instance of like animal spirits kind of really rearing its head on Ethereum.

• 5:14Ryan Sean Adams?

  Okay, so that. What else along the way?

• 5:17Speaker 01

  I mean, of course, ETC, that was the, yeah, the hard fork war. And then I love how it was almost like a TV series where just as the ETC chapter was winding down at that exact time, the Shanghai DOS attack chapter began. You know, the writers put that in at exactly the right time. Maybe it was the same writer, I don't know. But that was such a fascinating series of technical challenges. NFTs were a big one. I was not really expecting anything like NFTs at all. I mean, definitely just like the, the scale to which DeFi grew once

• 5:57Speaker 01

  it actually started, going from just a Uniswap barely existing in, in 2019 to just like the really big boom that we had even only a year and a half later. And then other things, the, well, proof of stake taking much longer than I expected, of course. ZK happening like five times faster than I expected. That was good. The, the sheer level of institutional and then even government interest that came almost from the beginning, like even in the 2010s, there were lots of, like, a lot of big companies that were floating around and that were really interested in the space. A lot of governments were interested. I think

• 6:42Speaker 01

  a lot of that early interest was like VRA abstract and I think just people trying to like either be Innovative or show that they could be innovative, but even still, it was not something that I expected. And then now, of course, I think we're seeing the institutional interest come back, but in this much more concrete form, other things.

• 7:07Ryan Sean Adams?

  One of the meta things you mentioned, Vitalik, is that all of this took longer than you thought it would, at least when you published the white paper. Why, why did it take longer? And when you say like, take longer, are you talking about it's taken longer to kind of, you know, get to proof of stake in the first place to sort of implement the roll up roadmap? Like, what specific pieces took longer than you originally thought and like, why?

• 7:33Speaker 01

  Part of it, I think, is just software being hard in a way that I did not have the experience to appreciate. Part of it was also, I think, us just setting higher and higher standards for ourselves, right? Like, the version of Ethereum that we wanted to get out in a few months was actually what we would today call a layer two on top of Prime Coin. And then, of course, what happened was that we saw the amount of attention and interest that we got in January. And we realized like, this is something a lot of people are putting their hopes into. This deserves a much more serious job. And so we decided like, hey, we want to actually make a proper L1. And, I mean, of course, you know, at the time, L1s where that like, where it really made sense to build all twos on top of them.

• 8:18Speaker 01

  We're not really something that existed. What else? Yeah, I think it's probably a, yeah, a combination of those two things. It's like technology taking longer than expected and us just like continually raising our own standards.

• 8:32David Hoffman?

  In Ethereum's history, you talked about some of them. There have just been some of these huge challenges that were just totally unpredictable. The DAO fork being the first one, the Shanghai attacks. But even in times of like Ethereum success, like the NFT mania in 2021, there were also challenges to the Ethereum project. And, you know, the Ethereum project has just been faced with, it's just a series of challenges over and over and over again. And I want you to comment on like, How Ethereum specifically, how that strategy has emerged as a culture, as a community, as people inside the Ethereum Foundation, people in Ethereum Cordas and the Ethereum community, we've developed responses, strategies. We have a particular

• 9:13David Hoffman?

  strategy to overcoming challenges that is unique to Ethereum. And now that we have like kind of 10 years of data, how would you articulate what Ethereum's unique strategy is for overcoming challenges that are inherently unpredictable?

• 9:27Speaker 01

  I think we do a really good job of approaching the problem as an ecosystem. Like, there's always a lot of different approaches that get tried at the same time. There's generally an L1-based approach. There's some kind of application layer approach. Often, there's multiple competing approaches in each category. And like, we, I think, actually are able to pursue a lot of tracks in a parallel. We're able to even get a lot of synergies between different tracks, particularly in the way that like, a whole bunch of different efforts in the space simultaneously contributed to making ZK Snarks more mature. That all

• 10:08Speaker 01

  helped each other. Yeah, I think like the the style of collaboration that the ecosystem has developed, I think, has been, has proven really fascinating. And I think it's, you know, definitely it's not been perfect, but you know, like, taken all together, it's worked quite well.

• 10:27David Hoffman?

  If you could go back in time to a younger version of Vitalik or a younger version of the Ethereum Foundation and teach them something that would help them in Ethereum's journey, when would you go back and what would you teach?

• 10:41Speaker 01

  I mean, one answer that comes to mind is, of course, all the way back to the beginning and just everything we know about ZK Snarks. Like, that just has been such a powerful, like, game-changing technology in so many ways.

• 10:54David Hoffman?

  Just in the sake of leapfrogging Ethereum ZK technology 10 years.

• 10:59Speaker 01

  Yeah, exactly. Like, I think there have been a lot of these, like, technical wrong, either wrong steps or like side roads that we've taken that we did not actually really need to take. And like, had we, if we were just knew what the end state actually looked like, then like, there were situations where we would have saved a lot of resources and a lot of cases come to things much more quickly. So, yeah, I mean, you know, not being able to predict the future is definitely one of those annoying downsides of Ethereum. Yeah, I mean, it's interesting, because people do ask me, like, what would I have, like, what time capsule message would I have sent to myself? And like, a lot of the time, the answer just is, I mean, like, one of these kind of just,

• 11:44Speaker 01

  like, just give myself the correct answers technically, sort of things. But then, I wonder, like, what kind of other, what other answers there even could have been other than just a big warning to be more realistic in terms of expecting timelines? There's like, sometimes I think to myself, I'm like, might there have been ideas on the, I guess you could call it more social side or economic side, that in retrospect could have made things quite a bit better? So, like, one of those examples potentially is, you know,

• 12:26Speaker 01

  should Ethereum have had a, like, time limited, I mean, like, portion of the supply given to public goods based on, you know, like, even some crappy mechanism that we knew about back in 2014? Right? And, you know, the argument there would basically be then, like, we could have potentially been able to have, like, no explicit premine, but then have, like, basically something like miners voting based on, you know, like, flags in the past 1024 blocks, I mean, like, on who gets the developer awards. And it possibly would have led to very similar results or potentially even more funding for, like, both the foundation and other organizations.

• 13:09Speaker 01

  But it could have bought us, you know, like, more credibility in the earlier days. One of the things I think about is also like, could things have been done better in terms of the early relationship with Bitcoin? Like, I think it's kind of always a bit sad that Ethereum was not able to kind of capture more Bitcoin momentum. Like, okay, maybe, like, here's one of the crazy, crazier hypotheticals. Like, if, for example, Ethereum had, like, one, done the issuance based on the formula that I said, and then, two, like, let's imagine if it actually had been a fork of Bitcoin, and then, on top, like, it just said, basically, hey, we are switching to proof of stake.

• 13:53Speaker 01

  We're gonna start with some crappier proof of stake on day one. Uh, but then, like, we'll basically, yeah, issue the entire, like, an entire remaining 4 million ETH based off of, I mean, like, some developer formula, right? Potentially, the, the, like, Ethereum could have just been the Bitcoin big blocker camp. And, and I think, I remember, I imagine you guys have probably read, I mean, you know, the, the reviews I've had of the, you know, like, the big and small blocker sides of the block size war. And I wonder if, like, basically, if, like, Ethereum had just been the Bitcoin blockchain the whole time, like, there probably would have still been a fork, but, like, the whole thing could have potentially proceeded much more productively.

• 14:38Speaker 01

  So, like, that's one of those things that I sometimes think about, but then, like, there, but it's, but it's easy. You know, there's unintended consequences and surprises in all directions, right? Like, it's possible that if you drag an existing community with you, you have lots of stakeholders from day one, and then there's just, like, a lot of things that you end up not being able to execute well on, so, I don't know, like...

• 15:02Ryan Sean Adams?

  I mean, it's always struck me that the Bitcoin kind of religion or philosophy has somewhat evolved into monotheism. And so, I wonder if any kind of split coin would have always been destined to divide that community and splinter them in some way. I, like, but we're 10, we're 10 years in now, right? And Bitcoin is what, 16, something like that?

• 15:24Speaker 01

  Yeah, sixteen, yeah.

• 15:26Ryan Sean Adams?

  Okay, so, you know, we're all kind of grown up together, I guess, you know, Ethereum's entering its teenage years and I guess Bitcoin has just learned how to drive, something like that. Do you feel like the the relationship has improved between Bitcoin and Ethereum? Or is that just the ratio? I feel like Bitcoiners are always nicer to Ethereum folks when, you know, ETH is suffering on the Bitcoin ratio. So they're kind of quiet now, but when when price direction changes, maybe maybe things will change. But I feel like there's less hostility, maybe, between the newer cohorts of Bitcoiners and Ethereum. Like, how would you characterize the relationship today?

• 16:02Speaker 01

  It depends what you mean by the the new cohorts, right? Because I think there's like different types of new cohorts. There's the people who are trying to be technical and trying to do BitVM and Taproot and OpCat and all of that stuff. And then there's the sailorists. And like, I don't really expect the sailorists to ever be particularly friendly or to have like any especially aligned values with Ethereum. I, yeah, it's in, on the technical side, I mean, I think, you know, there's definitely, yeah. I mean, the the smart ones, you know, I think there's they have a lot of respect for the things that Ethereum is doing in terms of

• 16:47Speaker 01

  like both the technical progress that it's made and increasingly the way the ecosystem is standing up for privacy. I think both more and more openly and more and more in a way where like we're not we're not just bringing vibes, we're actually bringing results. And on that, at the same time, I think it's, you know, a lot of people respect how, like, people in Bitcoin actually are really trying with, like, OpCat and some of these like new Bitcoin layer two ideas. And there is quite a bit of like really fascinating technical work there. So, you know, I think it's definitely more positive in that way.

• 17:24Ryan Sean Adams?

  When you see people building on Bitcoin in like the technical way, like people building on the BitVM, trying to make Bitcoin more expressive, do you ever think, man, you guys are just wasting your time, just come build on Ethereum, that's what we built Ethereum for, that's what it's for? Or do you think, or do you actually look at it with like curiosity and like optimism for what they can do there?

• 17:44Speaker 01

  Some of both, I guess.

• 17:47David Hoffman?

  I want to ask about the current moment of time that Ethereum finds itself in.

• 17:53David Hoffman?

  Recently, with the election of Donald Trump, we've seen a social trend shift, both inside of crypto and outside of crypto. And maybe just to kind of name this social trend shift, I'll describe it as a feminized WEF soy boy mentality shifting to a Bronze Age mindset, to quote someone on Twitter. Kind of like, you know, out with the woke, in with the based. This is kind of the current zeitgeist of of culture in this time. And we saw this in crypto, too, where many projects just kind of like jostled to position themselves as like USA-based projects. We had that infamous like Solana marketing video about wanting to invent technologies, not genders. And now we're seeing this still today in the cultural debate that's like spawned out of like Sydney Sweeney's genes. Notably.

• 18:37Ryan Sean Adams?

  Oh, God, has that infected crypto yet, David?

• 18:40David Hoffman?

  Oh, I mean, I see it on my timeline.

• 18:41Speaker 01

  It has now. Congrats.

• 18:45Speaker 01

  This episode is the memetic super spreader of edge.

• 18:47David Hoffman?

  Yeah, right, exactly. So notably, Ethereum has not participated in this trend shift. Whatever.

• 18:55Speaker 01

  By the way, I want to publicly thank Sydney Sweeney for not making any NFTs.

• 19:01David Hoffman?

  You've also given her an idea, Alex, so watch out. So I want to ask about like, you know, whatever Ethereum was before this cultural trend shift, it still is today. And I want to ask, is that by design? Is Ethereum supposed to be this bulwark against the changing like zeitgeist, the changing fad of the times?

• 19:22Speaker 01

  I mean, Ethereum is, I think, supposed to be a pluralistic ecosystem that incorporates a lot of different people and a lot of different viewpoints. Though, at the same time, especially in a world where there's many different cryptocurrencies and many different ecosystems, you are going to get like different levels of drift, what were kind of, you know, like self-selection happening organically. I mean, even if Ethereum was the only cryptocurrency, like I think you'd expect to see like differences in cultural valence between Ethereum and AI, for example. And I mean, I think it's the duty of each project to just try to make the best and most

• 20:05Speaker 01

  upstanding version of the philosophy that is that that its members are most enthusiastic about and comfortable with. And like, hopefully, we, you know, the result of all this is that we get things that are productive and that improve the world across a lot of different directions instead of just like projects that fight each other in like either fight each other or that like basically get stuck in this mentality where all that they do is just kind of shout vibes. And then I mean, you just have like one group shouting one vibe and other group shouting another vibe and they yeah, you know, feel very righteous, but then you come back in three months and you realize they haven't actually made any

• 20:48Speaker 01

  progress. And so like, I think like personally, I like, there's definitely things that worry me about, you know, quite a lot about various cultural shifts that we've been seeing in the world. But then, you know, if you just worry, then ultimately, you know, you're just one of the vibers. And so I think the practical question is, you know, like, well, how do we actually advance and respond and actually, you know, create the next and better version of a competing alternative? Right? And so I think in that regard, like the couple

• 21:30Speaker 01

  of new themes this year have been, and so one of them is that I've tried to kind of say and do things to sort of reset the conversation on public goods funding in DAOs, right? Because like, I do think those are important topics. And I do think that if you just give up on funding public goods, if you give up on basically any form of governance other than founder dictatorship, like that still has a lot of quite negative consequences. And, you know, the the end state of that is that you just sort of get back to like, essentially, trust me land.

• 22:07Speaker 01

  And but at the same time, like quadratic funding has actual problems like token voting delegation DAOs have really big problems. And so I've been trying to be supportive of prediction market-based funding and prediction market-based DAOs. I've been working with Devanch quite a bit. I mean, he's been doing deep funding and he, which is like public goods funding. And there's a version two, which is pretty directly based on prediction markets, basically combining together like prediction markets with this jury mechanism that's like, basically the idea is that if

• 22:48Speaker 01

  you have a gadget that can give an opinion of like a high quality opinion of how valuable something is, but it takes a lot of effort, then you can use prediction markets as a way of scaling it. And my underlying philosophy is to try to replicate the best aspects of free markets, but for the public goods funding domain, right? So create that, you know, in open, well, what political scientists call an open access order, like a game where anyone can come in and if they do a good job, then they can feel like succeed and they can feel like they have a fair chance. Then something that doesn't devolve into being a social game,

• 23:32Speaker 01

  something that doesn't devolve into being a game of convincing a few central actors. And then trying to like actually push that into some actual experiments. So Devanch and the Queris team have been doing some quite a bit of work there. And then the other big thing that I've been like really trying to push is this greater focus on privacy, right? And I think, you know, the reason why is because first of all, privacy is like, it has been a core part of the cypherpunk spirit since the beginning, right? Like if you remember Chami and ECash from 1982, Chami and ECash was actually not decentralized, right? Like it had a central operator that all of the transactions went.

• 24:17Speaker 01

  But it was private and it was private from the central operator, right? Because that was, those were the properties of the technology that we could actually do. And it was because of technological limitations that we flipped over and we went to Bitcoin, which was decentralized, but it was not private. But now, of course, we have ZK snarks, those technological limitations are gone and we actually can be decentralized and private, right? And so we actually should be. And so there's been some really interesting work that's been starting to happen in terms of like really standardizing kind of railway privacy pools type of things, making it easier to incorporate privacy protocols.

• 25:00Speaker 01

  Looking at privacy of reading the chain. So basically, like if you're an ordinary user and you have a browser wallet and you don't have two terabytes to spare, then you know, what is a way for you to access Ethereum without just revealing all of your data about everything you're doing to Infura? And so there's been some really fascinating cryptographic and academic work that's been happening there. And like, I think there, like it's, I actually, like, I think in terms of cultural triangulation, my role model there is Millay, right? Because if you look at what Millay did, I think it's actually kind of brilliant, which is that he basically had,

• 25:43Speaker 01

  like he has Bronze Age vibes, but his substance is actually the same, basically the kind of stuff that I think all three of us support and would have supported at any time in the last 15 years, right? You know, he, he has made markets more free. He has made the government more efficient. He has really reduced inflation. He has simplified a lot of, a lot of things in housing markets. He, he has done, he has done a lot, right? But, and he's also, he's reduced tariffs. He is, he's made the country more, more open. I mean, he is, I mean, his government's even, you know, like how those, like.

• 26:26Speaker 01

  Worked with us to make it easier for people to get visas for DevConnect. So actually, yeah, like in a lot of ways, I mean, like on the substance, he is, you know, like very not, I mean, like that kind of substance. But at the same time, you know, he has the vibes of the other side. And so he manages to appeal to a lot of people very successfully. And like, to me, privacy actually has a lot of those same properties, right? Because privacy, privacy is freedom. Privacy is a very important, right? That we're all here to protect. Privacy is something that's, that, that just has to be built technologically speaking. If you have privacy as a focus, then it is a, what?

• 27:10Speaker 01

  The game that you're playing is a game that's about doing and it's not, and it's not about talking. But at the same time, you know, we're, what privacy is not is privacy is not, you know, like multi-billion dollar grifting. Privacy is not, I mean, people ripping off T-shirts and thumping their chests a lot. Privacy is not, you know, colluding with politicians like. And so it's one of those things that I think really everyone in the Ethereum ecosystem should be able to get behind. And so I think it's something that we just have to really keep pushing forward on.

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• 30:39Ryan Sean Adams?

  Well, let's talk about it some more because I think that's like an interesting cultural component of how we balance kind of Ethereum values versus like this mainstreaming moment with TradFi's to talk about privacy. So I guess Malay you're saying is that he's got, he's sporting the Bronze Age mullet, let's call it, where you know, it's Bronze Age in the front, but it's good sensible policy and getting things done in the back. It actually works. And so how do we Bronze Age mullet our way to privacy on Ethereum? I mean, it does seem like It seems like in some areas, we've made tremendous progress on the cryptography side of things, like we have ZK technology that's just incredible. But times where we've tried to implement privacy, I mean, tornado cash, we've got the live court case going on. We don't know yet the verdict at the time of recording of Roman Storm.

• 31:22Ryan Sean Adams?

  And so anytime you get into financial privacy, you get nation state pushback. And there's, there's an argument that I've always thought was somewhat valid, that if Ethereum or Bitcoin for that matter, shipped privacy, you know, on layer one, from the very beginning, and it was all private, we would have never gotten this far in terms of broad acceptance, because there are forces out there that would have strangled this technology in its crib. And so how do we, I guess, what's a realistic way you think privacy can evolve, right? We've got these very niche applications, I would say, still like tornado cash and even things like Railgun, they can do some things, it's not user friendly, it's not broad, it's certainly not privacy by default. You've got things like Aztec that are spinning up, they're going to be in mainnet, but that's going to be its own separate roll up.

• 32:06Ryan Sean Adams?

  How do we balance all of these things and get to a place where we're happy and we're content? And I guess maybe nation states that try to preserve some level of freedom also feel fine with letting this move forward. Like, what's a realistic privacy roadmap here?

• 32:22Speaker 01

  Yeah, okay. So I think there's two parts to that. One part of that is just, like, how do we get from privacy being very niche to privacy being a default part of the experience? And question two is, how do we make a critical mass of governments and regulators okay with that? And I think for question one, so the reason why I have not supported, like, literal on-chain layer one privacy, yeah, like 7503, you know, like wormhole type of stuff so far, is not because I think it's fundamentally wrong, but because I think, like, it's basically too early technologically to make that kind of commitment.

• 33:04Speaker 01

  And what I mean by that is that, one, we don't yet know exactly which technology is will be optimal. And if we put a technology in as layer one, then we could. Could be locking ourselves into something very suboptimal, right? And this is obviously a concern with any EIP that we make, but with privacy, because like the data is inherently private. Like you can't just kind of muck around and like basically replace the tree and like search and replace one thing with another if you really have to. And so it's like, it's harder to upgrade, right?

• 33:40Ryan Sean Adams?

  But Talat, does this imply that you believe privacy on the Ethereum Layer One is fundamentally correct?

• 33:45Speaker 01

  I, yeah, I mean, I think in the long term, I'm very open to it, right? So one argument is that, right? It was, I mentioned like future compatibility. The other argument is security, right? Because like you have to remember that a privacy gadget on L1 breaking would be extremely bad because someone would be able to steal an unlimited number of coins undetectably, right? And I think like eventually the tech will be good enough that I think we will be able to make that jump, right? Like I, you know, I am serious when I said in my recent blog post about two weeks ago, that like there is a trend line that the number of bugs in code actually is trending down to zero.

• 34:25Speaker 01

  And so we will get to the point where we're going to have, be able to have very high levels of trust in code to the point where like security researchers who have been trained on the past, the past 20 years will find it unimaginable. And I think AI will accelerate that. But like before that, and also Zcash to their credit, like they've been brave and they've just like gone ahead and done it, right? So but even still, like that's a high bar, right? And so the question is, can we make privacy as default as possible without making it Layer One? And to me, the medium term target is to make privacy defaulted wallets, right? And the way that we do this is basically that I think the biggest mistake

• 35:07Speaker 01

  that we're making as an ecosystem right now is that we came up with this concept of a privacy wallet, right? And like, we should not have privacy wallets. Privacy should be a feature of wallets, right? Like, you know, you should, like, privacy features should be something that can be incorporated into existing wallets.

• 35:28Ryan Sean Adams?

  What are you talking about? So if I'm in my existing crypto wallet browser extension, let's say, or on mobile, there's an option, like I can send a transaction normally or I could send a private transaction? That kind of default?

• 35:39Speaker 01

  Exactly. Like you have private, a private balance and a private send button. And it's all like part of MetaBask or Rabbi or Ambier or whatever.

• 35:45Ryan Sean Adams?

  And can we do that now? And why don't we do that now?

• 35:48Speaker 01

  Yeah, I mean, there's actually, yeah, some work that's starting inside the EF to try to move move things in that kind of direction already. So hopefully, yes, some of that should come out over the next few months.

• 36:01Ryan Sean Adams?

  What about the other part of that question, which is how can we get nation states? Like, obviously, projects like Ethereum want to push the overton window towards more privacy, more open source, more decentralization, right? And so, Joe, to some extent, that will be anti some, you know, governments, some cultures that don't embrace that. But we want to push the culture over. And also, we want mainstream acceptance of this thing, right? We can't have it illegal in all of the countries of the world. Is there some sort of balance we can, like, get to get some of the nation state concerns around criminality and money laundering? And also balance the cypherpunk values here? Are these just incompatible?

• 36:40Speaker 01

  Yeah, so I think, first of all, like, all of the progress that we've been making on, like, the privacy pools concept over the past couple of years has been very good, right? Like, now Railway, like, Railgun exists, and you can use it. And there's successful cases where we can point to where it's actually prevented people who have hacked large-scale DeFi contracts from putting their funds into it. Privacy pools doing very similar technology. So like, that whole concept is starting to be more battle-tested, right? And like, the thing to realize so far, right, is that in terms of illicit funds that pass through privacy protocols, like, by far the largest portion of it is people stealing from DeFi

• 37:24Speaker 01

  protocols, or possibly people, I think in some cases, stealing from individuals, right? And in both of those cases, like, both of those are actually very amenable to this kind of, like, privacy protocol level blacklisting, right? Because, you know, if your money gets stolen, then like, there's just, presumably, there will be just an API where you can just, like, basically flag your own coins as being suspicious, right? And if a DeFi project gets hacked, then it'll do the same thing, right? And so- I think like that already is something that can like really yeah push things push

• 38:03Speaker 01

  things forward quite a bit. Um. In terms of like how much more we can or will need to do, I think the thing to keep in mind, right, is that like the fiat ecosystem is definitely not a paragon of bad actor resistance, right? Like, there's all kinds of bad actors that have all kinds of ways to move money around, to like anonymize themselves, to avoid detection, and like the the equivalent of, you know, like seven proxies and all of these things like, well, look, there are ways and they yeah, and they know how to use them, right? And given that, you know, the funds are like transparent on a public

• 38:48Speaker 01

  blockchain, at least in the sense of like you can point to transactions that are happening. And, you know, if you're if something happens to your money, like, you know, you know when it's it's getting moved. Like, I actually think that getting to a level of like bad actor resistance that or unfriendliness that approaches the fiat ecosystem, but at the same time, giving people much more actual privacy is like, probably quite doable, right? So I think to me, that's like one part of those prongs. And I think the second prong is that like, we do just need to make the positive case for why greater levels of

• 39:28Speaker 01

  privacy are important and including being important from the perspective of law enforcement type objectives, right? And like for me, the motivating example of this is that like there's been a couple of these cases, like it actually happens all the time now. Most recently, there was like telecom wiretap data, like the type of data that basically telecoms are required to collect and give to the government under the Communications Assistance to Law Enforcement Act, like a bunch of that got hacked. And I believe like it's the the the evidence is leaning that it got hacked by. China, but or some China affiliated actor, but like actually, yeah, I mean, like, I have no idea. I mean, like, all of these things are probabilistic.

• 40:13Speaker 01

  And like this is like, that's just one example. And like, actually, you know, this happens in all kinds of directions among all pairs of the nation states all quite a lot recently, right? And so like a world where like every, basically a world where you you have this kind of centralized data collection running rampant is a world of fragility, because if those databases get hacked, then data that you think might be contributing to national security, just in case, will will actually end up contributing to national insecurity, right? And I think like that just is a case that needs to be, needs to be made much more strongly.

• 40:56Speaker 01

  Yeah, I mean, like to lawmakers, to the, to the public in general, that's like aggressively minimizing data collection is actually the safe thing to do. And this is the thing that we should be moving toward and privacy preserving finance is part of that.

• 41:15Ryan Sean Adams?

  So I think you're you're signaling that you at least would like to hold firm in crypto and Ethereum on on privacy, right? And it's like, this goes back to a broader culture question, I guess, I want to ask about Ethereum. It's been my observation of the last, you know, like 10 years, that some of the cypherpunk things that we've tried have worked, but not in their idealized version, if that makes sense. And so right now, we're at a moment very much in Ethereum's history where we are on, we are actually onboarding the world. I mean, mainstream is coming, like Robin Hood doing a layer two and JP Morgan talking about doing stuff on chain and Coinbase getting larger and larger. They're all coming to Ethereum. And so there's kind of a question here about where you get some of that traditional finance and mainstreaming, who don't have cypherpunk values, right?

• 42:00Ryan Sean Adams?

  And you were talking about Ethereum pluralism. Okay, so we we let more people into Ethereum, but with this pluralistic idea, but they're less cypherpunk. They care less about the values that that maybe we care about. And so there's a question of like, where do we draw the line? Because I Think about something like stablecoins. My idealized version of a stablecoin would probably be something like RAI. You remember that project, RAI? Okay, so it was all completely decentralized, it was all crypto native. Guess what? That didn't work. Like, no one wanted it. There wasn't product market fit in the Silicon Valley parlance. And what has worked? Circle, Tether, these other less idealized cipherpunk, stablecoins. But they are helping people. I mean, go to emerging countries and this is exactly what they sort of use. I guess the question is broad.

• 42:45Ryan Sean Adams?

  How do, when should we hold fast on cipherpunk Ethereum type values? And when should we adapt to the world around us? And really prioritize product market fit and actual usage?

• 42:56Speaker 01

  Yeah, I think there is a couple of places that are really the most key in terms of prioritizing privacy and cipherpunk values. I think one is, of course, the low level protocol, right? Because you can build a centralized or decentralized application on top of a decentralized backend, but you can only build a centralized application on top of a centralized backend. And for, I think similarly, like, there are places where if the blockchain is fundamentally not at least friendly to privacy and friendly to intermediary free ways of accessing it,

• 43:37Speaker 01

  then that just does not create space for the privacy friendly things to happen on top of it, right? And so like one of these examples is, this is the reason why I've been continuing to work on account abstraction and continuing to improve EIP 7701. Basically because I think if we do not do that, then any smart wallet use cases or any like multi-sigs, quantum resistant things, and also privacy protocols, they will only be able to function through an intermediary ecosystem, right? And the thing with intermediary ecosystems is that that's like exactly the sort of thing where like they work until they don't work for you, right?

• 44:23Speaker 01

  And so, you know, there are Like, there does needs to be some constituency that's like really watching out for these kinds of things and just making sure, you know, is it at least possible to interact with Ethereum in a way that is privacy preserving? Also, for example, in a way where you're not depending on a centralized intermediary to do your basic things. If any servers that you talk to disappear, like that does not lead to any of your funds getting stuck. And so, like, especially at the lower levels, these are things that need to be really watched out for.

• 45:01Speaker 01

  And then I think the second aspect of this is that the, the strong privacy focused and, I would say intermediary minimization focused, like way of doing Ethereum, like it needs to at least be possible, right? And part of that is the protocol layer, part of that is doing some of this work on the wallet layer, on the application layer. And I think to me, it's fine if the majority, if people do not take that option. But what we do not want to see is we don't, we don't want to see a world where the infrastructure to do that does not exist. And we do not want to see a world where the top level protocols like ERCs and standards are like just in some structural way hostile to it, right?

• 45:46Speaker 01

  So, I mean, maybe one analogy to this is, I think email is like actually a really great analogy to mine, right? Because theoretically, email is an open protocol. Anyone can make an email server, like you can go get a VPS, I mean, you can get a DNS account and like you can set up, you know, like ryananddavidemail.com and then give yourselves, I mean, [email protected], [email protected]. If you want, you could even write all the software yourselves and like the, you know, LLMs make that like actually way more practical for you guys than you might have ever imagined. But at the same time, you know, the problem you run into is basically, okay, you've got your own dinky little email server,

• 46:27Speaker 01

  but then by default, all the big providers blacklist it and they're blacklisting it because of like basically spam, right? And so, de facto, So email ends up relying on being much more of a centralized and the and permissions thing than it could have been, right? And so then there's the question of like, well, you know, like what things could have been done with email to to try to preserve its its openness better, right? And I think, well, like basically, what we want to ask the equivalent of that type of question, but then for any particular standard that comes up, right? So for standards for moving tokens from one layer two to another layer two, right? For like intent based standards, right?

• 47:12Speaker 01

  Like, one of the things I've been making sure is that for some of these, you know, like intent based, like trade tokens on optimism for tokens and arbitrary approaches, like, make sure there is a way to do it without talking to a server, right? And like, it is totally doable, right? And the the challenge is that, I mean, if you if you don't think about it, then like all the standards end up kind of assuming at the lower level that there's servers that you talk to, and then like you just get privacy leaks, right? And so I think like having people in the right places that are just watching for these kinds of things and that just make sure that like privacy friendly intermediary opt minimized, like more self sovereign ways of doing things

• 47:55Speaker 01

  actually exist and don't have at least like a needless performance penalty to them is important. And if not everyone takes that option, then fine, right? Like if a bunch of people, you know, like starts like continue to hold their coins inside of Coinbase, then fine, right? If a bunch of people continue to use MetaMask that directly, you know, like fully trusts in Furo without it without any protection, and they decide not to add any of the any of the protection based on, you know, like either Helios or some of the private RPC stuff that we're starting to do, then like, fine, right?

• 48:34Speaker 01

  But like the the place to start is just the option existing and the social norm that a like a product, protocols and standards that get built have to take into account the need to be at least accommodating of people who take that option.

• 48:52Ryan Sean Adams?

  Yeah, great news for for David and I too is Ryan and David dot com, email dot com is available right now. So we could just go spin up a VPS and start making it now.

• 49:04Speaker 01

  I wonder if any agents have already registered David and Brian E. L. dot E.

• 49:11David Hoffman?

  Good question. I want to get into some more narrow topics about Ethereum in more recent times. But in order to get there, I kind of want to ask one last zoomed out question to really kind of frame the stakes of some of those incoming questions. And so I want to present the future. There is, there are particular versions of the future that we know are coming our way. We know AI is going to define the future and we can, you know, we can talk about the different ways that that looks. There are also geopolitical tensions that seem like they're on the horizon. There's seemingly an increased Balkanization of the world. There are just possible versions of the future out there that are like, kind of scary. And, you know, there's other possible, you know, there's other things to talk about that

• 49:54David Hoffman?

  are also kind of cool, like gene editing and all that kind of stuff. There's just, the future is coming. What role, Vitalik, do you think Ethereum has to play in the future that we know is coming our way?

• 50:05Speaker 01

  By the way, I'm glad that we're on the same page that gene editing is the exciting thing and AI is the scary thing, right? I think, you know, there are plenty of people that like have that flipped. And I think I'm like the, the version that you described is the correct one. But yeah, what role can Ethereum play? I think to me, the answer has always been in two parts, right? So one, like the fundamental product I think that Ethereum offers is, you know, protecting people's freedom and self sovereignty and ability to organize in a way that does not depend on or is, you know, like any kind of mask for any individual, you know, like

• 50:49Speaker 01

  person or company or a nation state, right? And I think in a world that is more Balkanized at the physical layer, like that's a very valuable thing and that's an increasingly rare thing, right? Like if you, if you turn back the clocks, you know, the clock 15 years ago to like Facebook, like I think basically there were a lot of people who were willing to give Facebook the level of trust that today we will, like we pretty much all agree that is a level of trust that is only really deserved to give to something that's like a blockchain, right? And so 15 years ago, I think, you know, the In that sense, sort of the market was not ready, right?

• 51:31Speaker 01

  Because like the whole idea that trust issues are something that you have to worry about was not really there. Like famously, it was the era of privacy is over. I remember, I mean, there were a lot of people, Mark Zuckerberg's real name policy famously more than. I personally remember hearing people like basically saying like privacy is over at cloud computing conferences. And then, of course, you know, fast forward 10 years and then like even those guys are starting to talk about things like T E is now.

• 52:08Speaker 01

  And so I think in that sense, you know, the the market for trust technologies is something that's ready. Like it's and I mean market in like a very expansive and metaphorical way, right? Like there's people who are willing to pay money for these things. And then also there's people who have like, say, social problems that they care about, who are willing to embrace these kinds of technologies as a part of the solution. And I think that's that like that exists to a much greater extent than existed 10 years ago. So I think that's part of it, right? Which is just building the technology that actually is able to do those things.

• 52:49Speaker 01

  And the second part is like, I think there is an unavoidable aspect of this, which is global community building, which is basically that Ethereum is this powerful intellectual attractor for people who care about decentralized finance, for people who care about new forms of creating organizations, for people who care about things like prediction markets, increasingly for people who care about privacy, for people who care about making democratic modes of organizing actually work in a technologically advanced society. Like there's a lot of these different topics that Ethereum ends up being adjacent to, where I think like the community itself is a valuable good,

• 53:34Speaker 01

  even in a hypothetical world where let's say tomorrow we discovered that. So I mean, P equals NP and we all had to pack up our bags and go home in terms of in terms of blockchains because cryptography can't exist anymore. Right. So I think that's also something that's really valuable to continue building on.

• 53:52Ryan Sean Adams?

  In the early days, there was this meme of Ethereum as kind of a world computer that has kind of ebbed and flow as a meme that's worked. In your May post earlier this year, you called Ethereum a world ledger, which I think that resonates with me and feels less abstract, a bit more concrete. Maybe to some folks it won't, but to me it sort of implies, okay, it's a it's a world ledger that I can use to register things like property, for instance. And another thing I keep coming back to of like, what is Ethereum? It's a decentralized property rights system. I I get for many normies, that's still a bit too abstract. But to what extent do you think that encapsulates what we're trying to do here? Ethereum as a world ledger?

• 54:36Speaker 01

  Yeah, I think to me, the really valuable thing about Ethereum as a world ledger is it's like, the problem with the world computer is that a computer is like an inherently super expansive concept, right? Like, computers do everything for you. Like, computers generate your cat pictures now. They, you know, they used to look at your cat pictures. They can convert your cat pictures into videos. They can translate the thing that the cat is holding up on its sign into German. And then, you know, do a video and it's a video for that. Okay, I have lots of cats and AI examples clearly, but you know, the point is they can do lots of things for you. Right. They they can categorize your life. Okay, how about that?

• 55:21Speaker 01

  But the like, basically, they do lots of things that are just obviously totally inappropriate for especially the Ethereum L1. Right. And so the nice thing about ledgers as a word is that it feels like it encompasses the subset of a computer that's like really highly economically valuable. And I think, I mean, obviously, the word ledger has these very financial connotations. And so it's also very clear to see. What it implies in the context of DeFi, but then it's also, I think, very easy to see the metaphor for like what the equivalent of a ledger is for something like ENS, right?

• 55:59Speaker 01

  So, and then the nice thing about that term is that then it starts to like, I think the thing that I specifically said is that the Ethereum L1 is the world ledger, right? And so I think it also at the same time tries to make the relationship between L1 and L2 more clear, which I think is one of my explicit goals. And I think, I mean, to the extent that people picked up on the phrase, it's definitely been successful at those things.

• 56:29David Hoffman?

  If Ethereum is the world ledger, what does that make ETH?

• 56:33Speaker 01

  Hmm. Okay, great. Now we have to figure out what is like the ledger equivalent of gasoline. I mean, I guess it's ink. I mean, okay, fine. Ink is a layer two, but like if ink has the TM symbol beside it, it's the layer two without the TM symbol, then it's like gas. Is that okay?

• 56:48David Hoffman?

  Works for me. I want to zoom into some of the conversations that was ongoing in the Ethereum community in 2024. I'll just kind of say, I'll define 2024 as like hard times for Ethereum, mostly just due to the decline of the relative ETH price. And it kind of created a bunch of infighting and what to do about that fact in the Ethereum community. Do you think Ethereum had a rough 2024? Is that, is that what you felt?

• 57:13Speaker 01

  I definitely think so.

• 57:15David Hoffman?

  How do you account for that? How do you explain like the story of Ethereum in 2024?

• 57:21Speaker 01

  Yeah, I mean, I think, I mean, the low ETH price was definitely one of those very big aspects that that led to a lot of things. I think a big part of it for a lot of people was also that like some storylines were ending without other clear storylines replacing them, right? In the sense that I think there were definitely people who became kind of quietly disillusioned with DAOs, but like it wasn't clear. You know, if you're, if you're the sort of person who likes DAOs, but then suddenly DAOs don't work, then like what else do you do? Then in NFTs, more

• 57:58Speaker 01

  Also kind of dying down in 2024. Meme coins were definitely on the rise in 2024, but then at the same time, I think. No, Ethereum people are just by nature wants to, you know, make a serious difference in making the world a more free and open place. And it's kind of harder to see how meme coins contribute to that. And also, of course, I mean, the largest meme coins were all happening on Solana. So what other, I mean, there were like a lot of these. I mean, also, I think another big part of it was, I mean, the whole like layer one versus layer two thing.

• 58:38Speaker 01

  And how kind of post, and people sometimes like pin it on 4844. I'm not sure to what, to what extent that's actually true. Not 4844, but, or actually, yes, 4844 and like having an independent fee market for, for blobs. And like basically the question of like, well, are L1 and L2 actually like cooperative? And then like, once there's a realization that there's this like more misaligned incentives like that naturally. Like leads to infighting more. So I think it's a combination of all of those actors, right? Or all of those factors, right? Like it was a moment where, you know, the price was falling and at the same time, it felt like, you know, there were a lot of storylines were kind of

• 59:22Speaker 01

  meeting their natural ends and it wasn't quite yet clear. What is the new thing that would actually come and replace them? Where that, I think that new thing has to be something that both is a moneymaker and that the Ethereum community could get behind until actually. I mean, I actually think in 2025, we're like actually starting to see answers to some of those, some of those questions. So I think that's one of the reasons for the positivity that we're seeing now.

• 59:54David Hoffman?

  Mm hmm. Yeah. I mean, there's still debate in Ethereum today about how much of the story of 2024 was just narrative psyops versus actual real problems that needed to be fixed. Like, the story, one of the big stories was that, like, the Ethereum rollup-centric roadmap would just became not what we thought that it would be. The fragmentation between chains was pretty bad. Every chain, every layer two feels like a brand-new chain. And in contrast to that, the layer one was just trying to not, wasn't really trying to scale. And it just kind of felt like there was the story out there that the Ethereum roadmap just felt incoherent to what its, like, end game was supposed to be, which is this global, unified world computer.

• 1:00:37David Hoffman?

  And then, you know, downstream of that, there were, there were changes made at the Ethereum Foundation, or perhaps not downstream of that. Maybe that's part of the psyop. Maybe you could actually kind of just fill us in and illuminate in the, the parts of the EF that many people aren't able to see. Why were there changes made at the EF? What needed to change? And where is the EF today?

• 1:00:57Speaker 01

  I think this is one of those cases where there were a lot of things that were coming for a long time, but like, you just needed any kind of trigger to, like, make them actually happen, right? So, I mean, the, the change in leadership was one of those examples, right? And I think, like, Aya has actually, you know, like, I think, feeling happier in the, yeah, her current president of board role, and she, you know, continues to be, yeah, active in some, some projects around, I think, adoption in Bhutan was, that was always, I'm like, one of her kind of interests. And there are some other things on the, on the financial inclusion side that, like, she

• 1:01:41Speaker 01

  has been spending more, more time on. Like, the executive director job is definitely not something that any one person should be in forever. And Aya, you know, like, lasted longer, longer than, like, basically, everyone else at the EF combined. So that was, and then, I mean, there are also, you know, like new voices that have a kind of new emphases, I think. I mean, you know, Tom and Shalay are both very strong technically in their own different ways. At the same time, there's been a lot of new people who are leading,

• 1:02:18Speaker 01

  I mean, like different parts of the foundation and different initiatives. So one, like kind of organizing the effort around scaling and UX was one of those parts. I think now, one of the things that I'm focusing on is also kind of better organizing the like censorship resistance and privacy side of things, right? And so, basically, yeah, there's a lot of things that are happening in terms of making PSE a more kind of focused team that's like basically moving from being about privacy and scaling exploration to about like bringing privacy

• 1:03:00Speaker 01

  ideas into production. So there are like, there's a lot of, a lot of interesting new initiatives that have started. And I mean, I think, like, these are things that, like, I think would have happened at some, at some time anyway, but like, sometimes, you know, these kinds of extreme moments, like they, they serve as triggers and often kind of accelerate and bring forward things that are, things that are coming and then like make them all happen at one time. So that's one part. On the L1 versus L2 thing, I mean, I think the interesting thing there is how that's like, I think, a relatively disconnected topic from the EF. I mean, obviously, the work that's being done to increase the L1 gas

• 1:03:42Speaker 01

  limit is very much in the EF topic. But, well, and then also the other big thread that we've been working on is the thread, the improving interoperability between L2s. So that's, I mean, it's actually an initiative that started all the way back in mid 2024, but it just, and I think that's like a good example, right, of how, like, there are a lot of things that happens that weren't just like Like all caused by everything that happens at the beginning of 2025. They had of were happening already, but then uh got accelerated quite a bit. And there's continuing to be good work happening in terms of the uh in in terms of the L two interrupt stuff.

• 1:04:25Speaker 01

  A lot more L twos have become stage one. I think the next priority after stage one is going to be like, so I actually think higher priority than stage two is getting to one hour withdrawal times. Or actually, like, it's, it doesn't even have to be one hour. Like, like, there's no reason it can't be like one minute or 12 seconds. Like, the fundamental limitation is just how much gas you're willing to pay. And the reason why is basically because if withdrawal times take an hour, then, or if withdrawal times take a week, then it's just too capital inefficient to use like native depositing and withdrawing for a lot of applications. And so

• 1:05:04Speaker 01

  like, sort of trustless and L one based ways of issuing assets are just not going to win in the long term, right? And like, what is going to win is basically, yeah, all kinds of like custom mint and burn bridges that end up concentrating power and control in a multi-sig, right? And so the thing that we need is so um for the L one based approaches to actually be viable. But for that to happen, uh like basically, yeah, you have to bring that one uh that one hour time down, right? Or that one week time down, right? Because for that one, that one week time, it's just, if he wants to move assets from one chain to another, or like,

• 1:05:45Speaker 01

  you don't want to make people lock up their coins for a week, or even pay someone else to lock up their coins for a week. Like, even the capital cost of that is too high, right? But if you, instead of one week, you're saying an hour, then suddenly, like, the liquidity for intent-based upriding becomes like very cheap, potentially free for a, for a lot of cases. And then, of course, if it goes all the way down to 12 seconds, then like potentially you could see a world where like withdrawing and depositing through L one just becomes the natural way for a lot of people to move their assets. Sets between L2s. So yeah, but like these things, they require a lot of movement from a lot of different actors of the ecosystem, right?

• 1:06:26Speaker 01

  Like they benefit from work inside the EF, they benefit from work in L2s themselves, they benefit from work being done by people like succinct. The whole ZKVM effort, I mean, like Risk Zero, all of the other different ZK providers. So it's one of these like big things where there's just a lot of these moving parts in the ecosystem. And like, it just has to come together and like really turn into a concrete solution. So I'm definitely more like quite optimistic now that we're on a good path to getting all of those issues resolved.

• 1:07:03Speaker 01

  And you know, both having a strong L1 and having L2s with a much clearer relationship with the L1. Um, but, and so, you know, it's, it'll still take time to finish all the different technological steps. But in general, I think we're in a good place.

• 1:07:21Ryan Sean Adams?

  Here's a take, Vitalik, and David and I have discussed kind of the 2024 Ethereum malaise a little bit, right? Not all these, a concept of L2s being parasitic, you know, and what should be done. It is true that I think David and I, most people in Ethereum feel much better about the current state of the Ethereum roadmap with some of the new leadership at the EF and also some emphasis on scaling the L1 and in particular a strong L1. But I wonder about kind of the, the roll up roadmap. And there's of course, a lot of things that have worked spectacularly about it, you know, Base deploying a roll up, you know, Robinhood more recently, more TradFi to come. Incredible adoption on that side.

• 1:07:58Ryan Sean Adams?

  Sometimes I, I wonder and have been concerned with the fact that we have emphasized, you know, the different stages of kind of property rights. Basically, user property rights on Ethereum layer twos. And we, you've made some progress in getting to stage one, and I think we will stage two, that's, that's going well. But we've had less emphasis on sort of the economic alignment, if you will, and the coordination across these layer twos. There are some things tactically that can be fixed fairly easily, I feel like with UX and. Standards where you can get assets from one chain to another. I'm not so much worried about that. What I am worried about is lack of economic coordination between all of these actors. And so if you get into a state, I remember your 2021 end game post,

• 1:08:40Ryan Sean Adams?

  which goes through conceptually a state where you have like basically Ethereum that's decentralized and Ethereum layer one that's decentralized. And then you have, maybe there's a world where you have one big roll up that has all the execution state inside of it, right? And you still make the argument, hey, that's, that's still fine because you have big block production that could be centralized. We'd still validate and verify things coming to chain and that could be in okay states, maybe not ideal. What I worry about in that scenario is what happens if we get layer twos? That becomes so much stronger than Ethereum layer one that they essentially get to dictate the rules. Okay, they could break away from Ethereum at some point in time. It just doesn't seem like a good economic balance.

• 1:09:24Ryan Sean Adams?

  And this is what it felt like with different chains and their own brands. They just, they didn't feel as Ethereum as Ethereum layer one did back in the day. So what do you think about this economic alignment piece? Do you think we can get that right? Is that still off?

• 1:09:38Speaker 01

  Yeah, I agree with that. And I think like you can look at the economic alignment issue from two different angles, right? Like one of those different angles is basically like, hey, L2s are not paying enough fees. And like, I think, you know, we should have a higher mean base fee. And if we just set or min blob fee, and if we set the min blob fee all the way up to one gray, then like, I think it would make a lot of things better and I think that's good. But then a lot of the time, I'm also not sure if like fees are even the right like primary variable to be focused on. Right? I think the right primary variable is more network effects.

• 1:10:18Speaker 01

  And then, okay, okay, maybe I guess this is here or like a place where I should that I kind of explain the reasoning behind this. Like focus on one hour was draw time a bit better, right? Because to me like that actually, yeah, like the thing that you say is exactly what motivates my goal of focusing on that.

• 1:10:37Speaker 01

  Which is basically that, like, if you have, the thing that is likely to lead to L2s sort of de facto spinning away is basically if all of the assets are issued on L2s. And like the assets are, and then people move them through mint and burn bridges and then basically the L1 is not actually involved at all, right? And the thing that keeps the L1 relevant is where assets, even if most of the activity happens on L2s, are issued on the L1. And the reason why I think that's important is basically, I mean, it's much better from a trustless perspective because

• 1:11:21Speaker 01

  all of these L2s, you know, they still have governance, they still have upgrade issues and so on. And so if you have the asset issued on the L2, then basically no matter, you know, where you move it, like you have to trust that L2, right? But on the other hand, if the asset is issued on L1, then like you, you can actually natively use the straw functionality and then like the L1 actually is this kind of ultimate decider, right? So it makes the security model clearer and it also makes a lot of these, like, it, it, it makes things much more permissionless because activity can more freely migrate from one L2 to another L2.

• 1:12:02Speaker 01

  It becomes more viable to have like applications that just natively do things across different L2s. Like basically, yeah, if, and then also of course, then any kind of technology that becomes developed for doing DeFi operations like synchronously between L1 and L2, we'll just like naturally be much more able to work with all of those assets, right? And so I think, yeah, like encouraging assets to actually be issued on L1 and making it economically viable to do that. And then just like using the standard deposit in which raw rails for doing that, like that, like that to me actually is one of these really important pieces in terms of keeping the L1 central. And so I think we should.

• 1:12:47Speaker 01

  Do that. And I think like I personally think also again, you know, increasing the the main block base fee all the way up to something like one gray is good. And like we should do, we should do both of those things. Continuing to figure out some of these, you know, like synchronous composability blocks, like can you make it possible for L2s to have blocks that synchronously do things between an L2 and L1. You know, I also think that's good. We definitely do need to keep like pushing forward on these things. And I think we do need to keep like pushing that vision that the point of L2 is something that gains value from interacting with the L1 and from

• 1:13:30Speaker 01

  being able to offload a lot of things to the L1 instead of an L2 just being a chain that's, you know, like happens to have a bridge somewhere.

• 1:13:38Ryan Sean Adams?

  So Dave and I very much operate on the layer zero, which is the social layer. And one kind of conclusion we've come to is that in order to sort of speak softly, but carry a big stick and increase Ethereum's layer one, a soft power, you have to have a scaled out L1 that scales maybe from a transactions per second perspective, but is also the home for DeFi. It's the home for liquidity. It's the home subset of that is for minting of the assets. And the stronger the L1, the more that you have the ability to kind of corral the layer twos. Essentially, you give them the carrot, which is you get the liquidity of Ethereum. Essentially, that's why you're attached to this. And that's why we're excited about, I don't know if you'd use the P word pivot.

• 1:14:22Ryan Sean Adams?

  There's been some debate about the semantics of this, but we're excited about the the initiative to scale the L1. We're also, by the way, excited. We think that higher value ETH is essential in that conversation because ETH is a store of value asset and that the larger ETH gets in terms of price, the more kind of liquidity and command you have over, you know, the L2s if they decide to to get a bit rowdy. Anyway, can you comment on the scale of the L1 path? So it's always been in the roadmap somewhere, maybe when ZK technology evolves to scale the L1. So from that extent, it's not a pivot, but there has been some recent reprioritization, it seems like. And it does seem with with the new EF leadership,

• 1:15:02Ryan Sean Adams?

  that's like number one, it's scale the L1 and scale L2 block space as what as well, but scale the L1 is a here and now thing. What's the case for scaling the L1 from your perspective?

• 1:15:14Speaker 01

  Yeah, I think the big question is always like, how do you scale the L1 safely? And like safely means not breaking the network, safely means not completely centralizing node operation, safely means I mean, being not breaking the staking ecosystem. And I think we actually have technologies to do that that did not exist years ago. Right? So the big one, of course, is ZK V M's and ZK V M's are like almost production ready this year in a way that was totally not true, I think, even one year ago. And so that's one thing that a lot of us are leaning in on explicitly. Like, I think there's willingness to explicitly say, like, we're going to increase the block gas limit by like three to five X.

• 1:15:59Speaker 01

  And then if that ends up eliminating the bottom 10% of solo stakers, we're not telling the bottom 10% of solo stakers to go screw themselves. Instead, what we're saying is, well, ah, the bottom 10% of solo stakers can use the ZK V M approach to validate the chain instead of re-executing everything manually. And like, that's actually safe, right? Because, well, 10% of the network relying on ZK V M's is like, basically, while the technology is at this medium level of maturity, like, it's actually fine as long as it stays under a third, right? And so it's like, the ZK is at this level of maturity where actually can start strategically relying on it partially various in various ways.

• 1:16:44Speaker 01

  Like, you can think about it as the equivalent of sort of that L1 itself going into stage one in a certain sense, right? And then at some point, once security goes of technology goes up more than, you know, L1 goes to the equivalent of stage two, and then you can start relying on the majority of the network using this kind of stuff. So that's one part, but ZK is definitely not the only technology for this, right? So the two other examples of technologies, one of them is history storage, right? So a big problem has been that nodes take up a lot of space. And now we've recently, yeah, finally implemented the most basic form of history expiry, which Expires history from before the merge.

• 1:17:26Speaker 01

  And so basically every Ethereum node has shaved a few hundred gigabytes off of its storage requirements. And then the plan is to keep on going further, like eventually get to expiring after one fork. And then like, I think the long-term target should be expiring after 36 days. And then for that to work well, you need to have some kind of peer-to-peer like torrent network type of distributed storage. So that we make sure that the chain actually does become fully accessible, like fully accessible and fully verifiable, right? So that the chain doesn't disappear, right?

• 1:18:02Speaker 01

  Like, we definitely do not want to become like Ripple where like there is weird things that happen because like this, I think the first 35,000 blocks like disappeared and they were just not able to find them ever, right? And so that like, so like the distributed history ideas from Portal, like those are actually making their way into production. That's another example. Gas sweep pricings, another example. Block archival access lists, I think, are another one of those really powerful examples because what block archival access lists let you do is they basically say every node except for the node that creates the original block can execute the block with maximum parallelization.

• 1:18:44Speaker 01

  Like, it doesn't freaking matter of like EVM versus UTXO versus Solana, whatever, right? And like basically what happens is the node that creates the block has to execute sequentially, but it can, but it generates hints, right? And the hints are basically intermediate states after every transaction. And then if you have those hints, then you become able to verify and re-execute the block by running every single transaction fully in parallel. And you can even parallelize between the execution and the I O, right? So you can have, like, the I O itself is actually much more efficient if it's massively paralyzed. And then that goes in like some threads. And then in other threads, you basically parallelize, you know, like you break up the block into different transactions.

• 1:19:27Speaker 01

  And then basically you have like a massive level of parallelizability that's completely independent.

• 1:19:34Speaker 01

  Of what the underlying virtual machine model is, right? And so that also is a thing that makes it safer to run Ethereum at much higher gas throughput levels, right? So basically, there's a lot of these technologies that just did not exist. And now they do exist. They've been really refined and really optimized quite a bit. And because of that, we have a lot more options than we did before to really get the best of both worlds.

• 1:20:03Ryan Sean Adams?

  Do you think with this combination of technologies, we can keep the quote unquote same level decentralization that Ethereum has while doing what Donkrad proposed, which is like aim for a social commitment of 3X per year? In terms of scalability, I don't know. Ethereum right now is after the recent block size increase, I don't know, we're 20 transactions per second. 3X per year is what Donkrad says. And then Justin Drake thinks a longer term resting point, maybe five year time, three to five year time, something like that is gig a gas on Ethereum layer one. So 10,000 transactions per second. Do you think that those targets are realistic here?

• 1:20:41Speaker 01

  I mean, I definitely become a kind of less sure of the higher end of some of those. Although actually, I think like my skepticism is probably more on short slot, like ultra short slot times than it is on ultra high TPS. Like actually, if I had to like, like if I had to choose one between, you know, what like

• 1:21:04Speaker 01

  give one second slots and 10,000 TPS. Like I think like in terms of which one is safer for Ethereum, I think 10,000 TPS with 12 second slots is far safer than one second slots with current level TPS. Because like at those levels, you're just running like speed of light, like very fundamental DGO decentralization type of stuff. So like I personally believe in caution at the higher ends, but I definitely think there's a lot of headroom to optimize. And like, I definitely think we're going much further than the current 45 million level. Yeah. And then in terms of like keeping decentralization, I mean, I think we're going to be at this interesting place

• 1:21:44Speaker 01

  that's hard to judge where like actually I'm hoping that in a lot of important ways, decentralization is actually going to increase. And I can give an example of what I mean by this. So One of the things that I think everyone quietly complains about is the fact that basically no one is actually running nodes and everyone is trusting RPCs. Right. And I think now, actually, for the first time in a while, I feel confident that we have a very solid roadmap to not needing to do that anymore. Right. And so one part of this is, of course, Helios, right? And like being able to have a light client inside of a wallet and the efficiency of that continues to improve.

• 1:22:26Speaker 01

  But then one other big reason why the cypherpunk types tends to value personal full node operation, and this is something that I actually did not even realize until I personally spent more time to actually going out and talking to some of them, right? Is the ability to run a personal node for the sake of privacy. Right. Because imagine if you're someone who is using these Ethereum privacy protocols and you are, you're using many accounts to do many different things and you really care about your privacy not getting compromised, but then, but you're still pinging in Fura

• 1:23:10Speaker 01

  about every, with every single one of the addresses that you're calling Get Balance on. And so Fura still knows all of your links to everything. Right. Now, running your own node is this incredibly powerful way of not having that problem, right? Because if you run your own node, then you actually are just downloading the whole chain and like, nobody knows what your reads are because your reads are entirely local, right? And so the question is, well, how do we get the best of both worlds? And the answer is that we actually will be able to and quite soon. Right. There's two different tracks for achieving this. So track one is, can we start from the current concept of an Ethereum node?

• 1:23:54Speaker 01

  And can we make it much more efficient? Right. And so here's how you make it much more efficient. You say, one, you do aggressive history expiry. You do aggressive expiry and not storing of everything. In fact, you even And don't need to store the the the branches of the state tree. All you need to store is like the table that just is the state. That table is 80 gigabytes. And if you have block level access lists and if you have a zero knowledge proofs like ZK EVMs to verify that the block level access list is correct, then you're able to stay up to date on the current Ethereum state, doing basically no local compute and only maintaining an 80 gigabyte database locally.

• 1:24:39Speaker 01

  80 gigabytes is tiny. 80 gigabytes is the size of like three or four different LLMs, right? But like like locally running LLMs, like everybody has 80 gigabytes, like even my phone has 80 gigabytes. And so 80 gigabyte storage, very low compute, still medium bandwidth, but that's fine, right? So that's kind of what and then if we decide to scale L1 by, let's like be medium conservative. Let's say, yeah, we're scaling L1 by 30x, right? Then obviously 80 gigs is going to turn into 2.4 terabytes. Then 2.4 terabytes is still, it goes back to being a lot, right? Actually, yeah, it goes back to being like basically the amount that you need to run a phone note today.

• 1:25:22Speaker 01

  Or like basically pre the pre-history expiry. So actually with, like, we've effectively given ourselves that 30x of headroom already, right? But if you want to go further, there's this concept of a partial state node. Partial state nodes basically say, ah, well, you just store all of the state except the junk. And there's a lot of junk. And then there's a lot of like complexity lying there in terms of, you know, your definition of what the junk is. But like really, if you just say, store state that's relevant to the top 100 applications and store all ELAs and all smart contract wallets, like that's already going to be like massive shrinkage, right? And so, so that's like one direction.

• 1:26:03Speaker 01

  The other direction is to say, well, let's start from a browser wallet and let's add guarantees to it, right? So part one is Helios, and so like clients, you can verify the chain. Part two is you can use technologies like

• 1:26:18Speaker 01

  In the short term, it's T E S with O R A M. In the longer term, P I R, which has cryptographic level trust properties, where you can make requests to a server without the server knowing what you requested. And like the server gives you a response, but the server has no idea what it just responded with. Right. And so if you make that kind of thing the standard, then like you're actually able to have this kind of strong privacy guarantee. Like you're basically able to have a light client where the light client is not just giving you the security property of a phone node. It's also giving you the privacy property of a phone node without actually needing to have a phone node. Right. So like basically we have like a couple of different paths from which we're actually able.

• 1:27:02Speaker 01

  We are going to be able to give people decentralization properties that they did not have even back in 2017. Right. Like even back in the days before L one, like basically started significantly scaling at all. Right. And so I think on a lot of dimensions, we get more scale and more decentralization and more privacy, more censorship resistance at the same time. There are places where I'm worried, like I think like continuing to make sure proof of state stays decentralized and block building stays decentralized is like one of those points where I think we need to watch out for. And like, I think having many different high quality research teams that have different focuses and approaches

• 1:27:43Speaker 01

  is going to be really valuable there. Right. But no, on average, I think we have like actually a very good track for increasing decentralization and scale at the same time, and we have to just take it.

• 1:27:56David Hoffman?

  I was listening to you on a recent epicenter podcast, Vitalik, and there's a quote that stuck out to me that I want to get you to double tap on. The quote was, "If Ethereum gets sucked into directly playing the H F T game, the high frequency trading game as a layer one, then to me, that will just fundamentally destroy Ethereum's soul." Because getting into the H F T game does destroy your soul. I didn't quite follow that conclusion. I'm wondering, like, why does, you know, Layer Ones that play the HFT game destroy your soul? What do you mean by that? And how is Ethereum's Layer One scaling strategy different from that?

• 1:28:32Speaker 01

  Yeah, so I think the core principle here is basically that if you optimize for one thing very aggressively, then the end state of that is that you end up anti-optimizing for everything else to a potentially infinite extent, right? Like, it's actually the exact same arguments that you hear from people like Eliezer Yudkowsky about AI safety, right? And like, it's just a general principle of optimization. And the thing with, like, very low latency HFT-type finance is that there is always, like, a lower latency that you can go, right? And if you want, and then the further you go into lower and lower latency, the more

• 1:29:16Speaker 01

  that increases the incentives for ecosystem actors to go in that direction. And like, there isn't really a natural stopping point, right? And it's a very easy route for just progressively giving up on more and more global decentralization. And so at some point, you get to things like, I mean, I can make some of this concrete with numbers, right? So like, for example, let's take a one-second slot time, right? And like, if you try to analyze what that means, right? So first of all, to have a slot time of one second, you have to break that up into two parts. There is block propagation, and then there is attestation, right? And then each one of those has to take 1X network latency. 1X network latency is 500 milliseconds, right?

• 1:30:01Speaker 01

  Then, average ping time from one part of the world to another part of the world is somewhere in the low hundreds of milliseconds, right? And so, basically, to even be, like, even being able to do that at all is like a challenge that requires some pretty aggressive peer-to-peer optimization. Like, you cannot have any redundancy in there. Like, you have to have very direct Broadcast and what this ends up leading to is like the basically the challenges like the bar that we have to meet is not the bar of like of of capability of participation.

• 1:30:40Speaker 01

  The bar we have to meet is the bar of not having strong incentives to co-locate, right? So it's not about non-co-location being possible, it's about non-co-location being at worst only a little bit less viable than ever than co-location, right? And then if you co-locate, like basically if you co-locate with a proposer, then effectively instead of having 200 millisecond latency, you have zero latency, right? And like, that's a really huge boost. And so if we go into the like that direction, then like the co-location incentives end up being everywhere, right? Because you know, if you're a DeFi participant, then you know, you'd want to be able to send your transactions in knowing all of the latest information as much as possible.

• 1:31:25Speaker 01

  Then if you're a builder, then like you actually have like every five milliseconds of latency that you get is gives you or that you remove gives you an ability to send out your block 1% further into a slot. And so potentially like that even gets you like, I'm not sure of the exact mathematical details, but like close to 1% more revenue, right? And so, you know, we see what HFT systems are like in reality, right? And they're like basically a bunch of co-locations of servers, like everyone tries very hard to get, you know, to get like very close to each other, right? And so there is this like type of activity where like, I actually think like this is Ethereum's barbell strategy, right?

• 1:32:05Speaker 01

  Ethereum's barbell strategy of L1 and L2 was basically that L2s do the thing that that requires centralization. And they actually get the benefits of centralization in which includes the ability to do HFT. But at the same time, they like they benefit from L1 providing security and censorship resistance. And then they give L1 the benefit of contributing to this shared pool of activity, but also sort of quarantining the L1 in terms of like concentrating, like making sure that some of these co-location incentives. incentives end up not affecting the L one directly, right? Because L twos are independently sequenced. So actually, this is also one of the reasons why, like recently, I have pivoted somewhat to being like

• 1:32:49Speaker 01

  less enthusiastic about based L twos and more enthusiastic about L twos that just say like, hey, we're a sequencer and we're gonna get the benefits of that, right? And like you could do lots of things in that configuration, right? Like you can even say, you know, you can have decentralized governance for kicking out the sequencer. And like that might often, might actually be a very good approach, right? And so I think L two does a good job, like L twos are the right structure that does a good job of absorbing some of that demand. Actually, if you fast forward even further, right? Like, we could talk about the AI economy, right? So AIs like think a thousand times faster than we do, right? And so if you, if an AI thinks a thousand times faster than a human,

• 1:33:33Speaker 01

  then what, from the AI's perspective, the subjective speed of light is only 300 kilometers a second, right? So subjectively, it takes only a second, it takes an entire second for a light to get from one city to a neighboring city. And so from the AI's pers, well, once you have an entire economy of AIs, which, you know, we're definitely going to get quite soon, then effectively, the concept of a global financial ledger doing everything actually stops making any sense, right? Like at that point, you actually need like basically city ledgers. And what, what is the right structure for city ledgers to be part of the Ethereum economy? Like, I think L twos are just, they're a very natural answer here, right?

• 1:34:16Speaker 01

  And so I think, like, basically, if the L one starts going in this direction, then a lot of centralization incentives end up, end up piling up. And also, if we commit to being competitive, then like we commit to be like, if we commit to being competitive in the HFT game, then we're committing to be in competitive in a game where like everyone else is very aggressively optimizing while caring about decentralization much less than we do, right? And so I think, like, this is why, like, I think the barbell strategy is the right approach, right? Where I basically, yeah, like L one does needs to improve. And I think L one does needs to have a, like, pretty good. Low latency from a human perspective, right?

• 1:34:58Speaker 01

  Like, I think Bitcoin with 10-minute block times definitely gets it wrong, right? And like, actually, Mill, if Bitcoin had, say, a 20-second block time instead of a 10-minute block time, like, I could see that significantly, yeah, like, making this whole kind of trend to, you know, like a Michael Saylor-style self-custody doesn't matter, like, basically, like, happening quite a bit less, right? I mean, it's only one of the 10 factors, but it's still important, right? And so, like, L1 having somewhat lower slot times is good, but, like, I do think that, like, this sort of market separation, where if you want, kind of, like, decently low latency,

• 1:35:39Speaker 01

  then you do L1, but if you want aggressively low latency, then L2 is the place to be in. We actually, like, do the work of figuring out how to make that synergistic is likely to be better for us.

• 1:35:51David Hoffman?

  I hear in your answer something that I hear pretty frequently, which is downstream of probably what is your most cited blog post between me and Ryan on this podcast, which is the Concave vs. Convex Dispositions blog. And like, what I'm hearing is, like, for example, Bitcoin, which is a convex ecosystem, they're a maximalist ecosystem, they focus on the 21 million hard cap, and the Bitcoin ecosystem and the Bitcoin culture downstream of that is all focused, is all centered around the 21 million hard cap. And you can look at Solana, and you can make that same comparison. Solana is centered around the I B R L meme, like, the reduced latency, high-frequency trading focus, that's what Solana focuses around. And Ethereum tends, trends to be more concave.

• 1:36:36David Hoffman?

  It tries to keep all possible doors open, it tries to be more balanced, and it tries to be just a little bit middle of the road. But Vitalik, there's also that line out there that I also kind of like, which is "everything in moderation, including moderation." And if we follow that meme, that logic, that means that, like, you know, Ethereum should be balanced about many things, but some things it should not be balanced about, some things it should be convex about. And like, Ryan, my partner here, he's actually trying to, you know, be- His chest as an Ethereum person and become like an Ethereum nationalist and promote Ethereum nationalism and kind of like Ethereum pride about the things that Ethereum stands for.

• 1:37:17David Hoffman?

  If you were to have your definition of Ethereum nationalism, what would it be? What should Ethereum culture and Ethereum values be convex about?

• 1:37:28Speaker 01

  Hmm. No, it was interesting because I I started thinking about an answer, but then you kind of pivoted into those sort of Ethereum as a nation discussion, which is sort of fascinating in its own way. But I think maybe, okay, maybe we'll start with my kind of the answer I was planning, right? Which is that I think one of the other like really important points here is that like actually the world is more complex than choosing one point on a slider, right? And like Ethereum benefits a lot from having multi-layered structure, right? Because if you have multi-layered structure, then often you're actually able to get the best of both worlds.

• 1:38:06Speaker 01

  I mean, actually, I can give a nation-state analogy here, right? Because recently, yeah, I mean, famously, there have been quite a lot of people arguing that it might be better to have nations that are run by dictators, right? So I mean, you have Curtis Yarvin saying America should have a king. Like this is a common viewpoint that lots of people have, right? And they say things like, oh, you know, dictators can kind of, they don't need to negotiate with people. They don't have political costs. They can just do all kinds of things if you were just very efficiently and they can direct big projects that make society better at scale, right? Now, one of like, there's lots of reasons why, you know, this is like, like, I'm not pro dictator, obviously, right?

• 1:38:48Speaker 01

  And there's big downsides of dictators that I think more than outweigh dictators, right? Or that more than outweigh the benefits, but. What's interesting is that the benefits of dictators are real, but like I think democratic capitalism has base, like you can think of it as actually being a way of like basically yeah, a kind of putting dictators in a box and getting their benefits without suffering their costs at the same time. Right. What is a dictator in a box? It's an entrepreneur, right? You know, you have these big titans like, you know, Yanshan Huang and, uh, you know, the, the various AI people and whoever else. And, you know, they're able, like they command significant amounts of resources.

• 1:39:32Speaker 01

  And then they, as that layer of the stack, their goal is to kind of move around these large, you know, quantities of resources and these large objects and to try to produce outcomes. And like, I mean, they do have to negotiate with people, but definitely yeah, much, much less than if you tried to allocate the same amount democratically. But at the same time, you know, you have this other layer of the social stack that's supposed, that that actually is much more democratic, that's supposed to decide on these systems of rules and incentives where if Yanshan Huang makes the world better, then he's able to get a lot more money and he is able to play the next round of the game with even more resources.

• 1:40:13Speaker 01

  Or if Yanshan Huang makes the world worse, then lower kind of case, he has, he makes less money or I mean, a maximum or low case, he goes to jail. Right? And basically, yeah, I mean, of course, I mean, this is something that has to be maintained carefully. Right. And if you get into a world where like basically the, the entrepreneurs sort of escape the box and then they start like effectively writing their own incentives and like that whole model breaks. And then effectively, yeah, you risk getting the downsides of, you know, the courtesy of a world without the upsides. Right. But like, I think there, there is an analogy here to, I mean, L1s and L2s are one of those examples. The applicant, even on the application layer, there's a lot of examples, right?

• 1:40:57Speaker 01

  And the analogy here is basically that a lot of the time, these things are much more centralized than Ethereum. A lot of the time, these things make UX trade offs that are kind of much more, so you might say normie favoring than the Ethereum L1. A lot of the time, they care.

• 1:41:20Speaker 01

  They care less about various cypherpunk values than Ethereum. But at the same time, if built correctly, you can have structures on the L1 whose job it is to hold them to account, right? And so, one example of, like, the most basic example is the proof system, right? Because the proof system prevents the L2 from claiming that something false is true, and it prevents the L2 from stealing people's money, right? Another example is like the bypass channel, right? This is the mechanism where if the L2 starts censoring you, then you, as a user, can like send your transaction, and then your transaction is just forced to be included in a block, and then you're able to get your assets out, right? And we actually saw, I think, interesting examples

• 1:42:05Speaker 01

  of these bypass channels actually being used in real life, right? And another example is like this idea that I briefly mentioned, where if you have a centralized sequencer, like, you could have a gadget on-chain for first switching the sequencer, right? If people vote that, like, hey, we have off-chain evidence that this sequencer is like abusive in some, you know, like, extractive MEV front-running sense, or they're not responsive enough, or whatever, then people can vote, and then that vote needs to be censorship-resistant, obviously, so it happens on L1, and so you replace the sequencer, right? And so, this gets into the discussion of like what I think Ethereum's strength is, right? That we are this ecosystem that has different actors.

• 1:42:47Speaker 01

  And so, I think we, as Ethereum, like, we have to figure out, you know, like, what is this right set of incentives? And, I mean, I think, as you guys said, right? I think like a strong L1 that's actually able to run all of this machinery is a really important part of these incentives, right? Because if you don't have a strong L1, then effectively, you're, you end up letting the entrepreneur out of the box, right? Like, you end up, like, for example, you know, you have a proof system that works in theory, but then, like, you start doing the fine print, and you realize, like, actually, there isn't enough space on the L1 for everyone to exit at the same time, and so, like, the whole thing is kind of a larve, right? And so, you know, a strong L1 is part of this.

• 1:43:30Speaker 01

  And basically, you know, the L1, like, part of its role is to create these, these boxes and like, and then like, actually make things on the, the full spectrum of, like, different types of, you know, centralization trade-offs and like, rapid, like, low latency Uox trade-offs and all of those things actually accessible to users. So that's kind of how, like, that's what I think Ethereum's like answer to the, the question of where the slider should be, right?

• 1:44:06Speaker 01

  Like, to me, Ethereum is the, this kind of sandbox where the, like, it's supposed to let people build on as many positions on the slider as possible at the same time. And I think that's one of its most valuable traits.

• 1:44:25Ryan Sean Adams?

  Yeah.

• 1:44:25Speaker 01

  Yeah, okay. I, I, I feel like I've taken the nation analogy in like, probably a totally different direction from what you guys expected, but.

• 1:44:32Ryan Sean Adams?

  Not at all. I mean, we could continue expanding. We love talking nation analogy for Ethereum, but one, one area maybe we could extend that is Ether the asset. So all nations have their own currencies and some have world reserve assets. And so, you know, the, the social era, let's call it, in Ethereum, and part of Ethereum nationalism and kind of the, the way that I use it is using ETH the asset as kind of a shelling point. And so let's talk about a few concepts here. One question I have off the bat, though, is what do you make of these ETH treasury companies that are springing up, right? So you said Tom Lee on the podcast, he says he wants to go acquire 5% of all ETH supply. All right. So you have a hard time doing that without bidding the price up.

• 1:45:14Ryan Sean Adams?

  What do, what do you make of these vehicles? Are you, are you think they're good? Do you think they're bad? Are you somewhat indifferent to them?

• 1:45:22Speaker 01

  Yeah, so I think the first on the first question, like the value of ETH, I mean, I think like ETH is the biggest thing that everyone in the Ethereum ecosystem is economically aligned on. And so I think maintaining a strong role for ETH is important just for that reason. Like if we had a world where, you know, the incentives of base and the incentives of bankless and the incentives of the EF like went off in three different directions with zero overlap, like Ethereum would break as a community, right? Hmm. And so, you know, I think that kind of core of like that economic core that ETH creates is something that is really important, right?

• 1:46:06Speaker 01

  And I also, you know, I have like many different theories of like where the value of ETH could come from. Like, there are many days when I realized that like, it's actually hard to outperform the theory that the set of price, the price of ETH is set by a cabal of fourteen demons who live on the moons of Jupiter. [laughing] Right? And like basically, everything that we're doing is just a competitive game of who best gives the demons on the moons of Jupiter the best show. But it's like, even from that perspective, like actually, you know, making Ethereum

• 1:46:50Speaker 01

  a more relevant and a more central ecosystem to, you know, global applications and finance is still the right thing to do, right? So I think, you know, there's transaction fees, there's network effect arguments, and I think the best things that we do are things that are kind of supportive of ETH from all of those perspectives. The, yeah, the Treasury Company is, I think, this kind of puzzles me sometimes, right? Because like, to me, I think of this as, I mean, first of all, you know, they're not operating with their own money, right? They're primarily, like, the point is that people buy into the Treasury Companies, and the Treasury Companies use this in order

• 1:47:31Speaker 01

  To buy ETH. And so they're effectively creating this kind of interesting leveraged financial product on top of ETH. That's like somewhere in between an option and a derivative. And you know, there's clearly a lot of people who who buy it and who value this this kind of thing. Which one's your favorite?

• 1:47:58Speaker 01

  Who's my favorite ETH treasury company? I mean, I guess, I mean, you know, the the US government that keeps confiscating from hackers is kind of cool.

• 1:48:12Ryan Sean Adams?

  But let me maybe make the case for for for ETH treasury companies. And this is a case of moderation. Okay, so there's obviously a world where ETH treasury companies go too far. There's too much and it's custodied and it's not bankless, all of these things. A case for them is that they act as a shelling point, coordination mechanism for ETH asset itself. And propagating that story into mainstream in some ways, to a lesser extent, but in some ways, the way Bitcoin has done that successfully. Now, you can always go too far, over leveraged, like more in custody than you want. But it feels to me like in entering 2025 versus now ETH is healthier in a place and Ethereum is healthier with a strong ETH.

• 1:48:53Ryan Sean Adams?

  When you have some of that activity and there's some representation of it in traditional finance, you get some of those capital inflows. What do we get from that? More economic security and more economic bandwidth to go create the cypherpunk things we actually want. So at some level, in some moderation, we had 0%, now we're at like 1% of ETH supply. Like this seems to have a good effect. That that would be my case for why ETH treasury is equals good.

• 1:49:18Speaker 01

  Yeah, yeah, I mean, I agree. And I think, yeah, like the the social aspect of coordinating around ETH just being an asset that companies can have as part of their treasury is is good and valuable. And like giving, having different vehicles for people to have access to ETH, which is, I think, one of the reasons why, you know, like people are buying into treasury companies. Instead of just huddling ETH directly is also good, right? Like giving people more options is good. There's always people in all kinds of different financial circumstances that put all kinds of like requirements or incentives or properties on like what formats of things that they participate in. And so,

• 1:50:01Speaker 01

  no, I think there's definitely valuable services that are being provided there. And yeah, like if you woke me up three years from now and told me that, you know, treasury is led to the downfall of ETH, then of course, my guess for why would basically be that somehow they turned into an over leveraged game and then at some point, you know, like they, a 30% drop turned into forced liquidations that turned into a 50% drop and then a 70 and 90% drop. And then that got compounded with a loss of credibility. And but, I mean, I think the, you know, people in Ethereum in general, you know, even including the people doing finance in Ethereum are responsible people like,

• 1:50:43Speaker 01

  you know, these are not Duke One followers that we're talking about. And so I think like, yeah, as long as, you know, like leverage doesn't go too high and these things don't start getting into those, those kinds of mechanics. So like, you know, I mean, like derivatives of ETH existing are like a fundamentally fine and, and stable thing. So, you know, good for them.

• 1:51:07David Hoffman?

  Zooming back out, you know, some, one of these ETH treasury companies, maybe two, will definitely be around in 10 years. I think that's kind of why people are excited is that these treasury companies can stand the test of time if they do things right. I want to zoom back out and just talk about the next 10 years of Ethereum. So Ethereum is 20 years old and we hope to bring you back on the podcast in that time to talk about.

• 1:51:29Ryan Sean Adams?

  We're gonna be old, David. We're all gonna be old AF.

• 1:51:31David Hoffman?

  But that's fine. And but Ethereum will be young. Ethereum will be merely 20 years old. What Vitalik, because Ethereum is an ongoing project. The job's never really done, I think. Like the job can become more done, but I don't think it'll ever be 100% done. So what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years? If the job's not done, what do you want done in the next 10 years for Ethereum?

• 1:51:56Speaker 01

  Yeah, I think one is like the technical roadmap, like basically being at at least some kind of like you could call it finish line, you could call it maintenance mode. Um, so like, I think to me, this includes one, ZK snarking everything, two, replacing any component that's not optimized with a component that is optimized. Uh, so, uh, you know, replacing Kajak with Poseidon or something better, replacing EVM with Risk 5 or something better at the very least as an option. Making all verification happen through ZK snarks, or again, it would have to be STARKs, making, like, making every node ultra light and verifying it.

• 1:52:39Speaker 01

  Verifying, uh, making privacy a default part of the experience, starting with payments and increasingly getting into, I think, more and more sophisticated forms of DeFi. Also, some form of self custody that is both self sovereignty friendly and friendly to normal users. Like, I think it actually can be done, and I hope that we get there. Formal verification on everything. I mean, it would be lovely if we could have a formally verified, secure, open source chain all the way down from, you know, top levels of the stack like DApps. And, and then you get into the Ethereum clients, and then you get even lower down to the operating system, and then ultimately to the hardware.

• 1:53:23Speaker 01

  I think that would be really cool. Then, in terms of, uh, like, impact on the world, I think, uh, I mean, finance happening on Ethereum by default would be, uh, amazing. Like, uh, if we, uh, actually get to a world where the financial infrastructure is such an infrastructure that if a user wants to, you know, they actually can, uh, kind of open up developer mode and, like, take their assets out of one application and then start to use another app, uh, use other applications instead. You'd be able to permissionlessly go and, uh, connect different things, make sure that people have, uh, strong options, uh, for preserving privacy. I think, uh,

• 1:54:06Speaker 01

  Be able to take their funds out of one wallet and move them into a different wallet and all of these things. I think that's all really important in general, like a future of computing, where a trustless vision of security that is based on cryptography and verification of code being a societal default and us getting to the era where we are using things where we have a strong assurance that they are secure and the era of trust

• 1:54:45Speaker 01

  me for security starts looking as archaic as the era of not cleaning our water looks to us today. I think that would be amazing. You know, we've already gotten there with HTTPS. I think we need to get there with it with everything else. And I think Ethereum can be a huge part of making that happen.

• 1:55:07Ryan Sean Adams?

  Vitalik, you wrote the white paper in 2013. You were still a teenager at the time. And so now maybe a personal question as we wrap this up. It has since grown over the last 10 years into a network that hosts almost $1 trillion in assets. And it does seem like increasingly, the entire world is building upon this world ledger. But over the next 10 years, what do you see as your role for Ethereum? Are you sticking around? Are you going to finish this vision? What does this look like for you?

• 1:55:41Speaker 01

  Hmm. Yeah, I think continuing to do everything that's needed in Ethereum is definitely a big part of it. I mean, I think over the last few years, I have been and I expect I continue to be involved in some of these broader DAK efforts. So, you know, we've talked about biodefense, I think before, security at some of the lower layers of the stack that we've talked about, I think is also going to be important as well. So basically, you know, like making This kind of full stack, open, secure and trustworthy world actually become a reality

• 1:56:24Speaker 01

  in ways that include Ethereum and also include a lot of other things I expect will be a big part of my focus over the next 10 years as well. I mean, I think it's basically, I mean, it's the same goal that I've had all the way since, you know, even joining Bitcoin back in 2011 and us excited that we can make it happen.

• 1:56:49David Hoffman?

  So Vitalik Bankless has been around for about half of Ethereum's lifespan, five out of the 10 years of the blockchain, knowing Ryan and I are probably going to just keep on doing this, right, Ryan?

• 1:57:01Speaker 01

  Sure, David.

• 1:57:02David Hoffman?

  Well, do you have any requests or guidance or advice for how Bankless should be with Ethereum for the next five to 10 years?

• 1:57:12Speaker 01

  No, I think, I mean, you guys have definitely done a good job just like being consistent this whole time and covering all of these really different and valuable parts of the Ethereum ecosystem. I think continuing to do that is important. I think also especially some of these, like there will definitely be a lot of newer things that need to be covered and supported, whether it's the things that are happening on the privacy side or even some of this newer wave of Dow stuff that is coming or I mean potentially yeah even all of these various

• 1:57:55Speaker 01

  different ideas of making Ethereum into something more like an actual nation. So no, it's a it's a big space and I appreciate all of the work that you guys spend on covering it.

• 1:58:08Ryan Sean Adams?

  Well, Vitalik, thanks for joining us today. Happy 10th birthday to Ethereum. That's a belated birthday, but we're still around that mark. And it's been great having you on. Thank you so much.

• 1:58:18Speaker 01

  It's been great to be here, too. Thank you, guys.

• 1:58:21Ryan Sean Adams?

  Got to let you know, none of this has been financial advice. You guys know crypto is risky. You could lose what you put in, but we are headed west. This is still the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.